SaaS Capital is an MRR-based venture lender headquartered in Seattle, Washington. Founded in 2007, SaaS Capital manages over $283 million across 67 investments and has completed 23 successful exits.
Recently, the fund has incorporated diversity and inclusion into its financing strategy, funding a collection of black and women-owned growth-stage B2B SaaS companies.
With a small team and focus on startups in Canada, the United States, and the United Kingdom, SaaS Capital establishes close relationships with the management of its portfolio companies, creating an ecosystem of supportive executives and growth opportunities.
About SaaS Capital
Saas Capital was founded in 2007. They currently boast a small team of executives headed by the company's Managing Director, Rob Belcher. SaaS Capital operates 4 funds, collectively worth $282.5 million. However, their last filing with the SEC shows that these funds have financed a total of approximately $44.1 million (June 2022).
SaaS Capital has provided venture debt to 67 SaaS companies, including Waggl, Inc., Traackr, Direct Commerce, and UberFlip. SaaS capital has also been a part of 23 successful exits since it was founded in 2007.
Eligibility and Products Offered
SaaS Capital offers senior secured MRR credit facilities that require no personal guarantee. They typically provide ‘scale-up’ startups with $2-12 million in debt financing, issued at an interest rate of 12-14% (August 2022).
SaaS Capital offers venture debt to companies based on their monthly recurring revenues (MRR). Typically, a startup can commit to as much as 4-7x of its MRR. It is worth noting though, that interest is not charged on the entire commitment, only on funds that are accessed. Startups are allowed to borrow funds from this committed resource and 12-14% interest will be charged on the borrowed funds.
Also, portfolio companies are obligated to pay between 1 and 1.5% of committed funds as an annual facility fee. Issued facilities can be amortized over a 5-year period. Companies are allowed to commit to a facility for 2 years, which can be renewed after that period, pending mutual agreement.
SaaS Capital provides financing for B2B SaaS startups headquartered in the US, Canada, or the UK and a minimum MRR of $250,000. Also, each applying startup must have a minimum customer retention rate of 85% and must be in need of $1 million or more within 1-2 years from the time of application,
How to Apply
When applying for funding with SaaS Capital, the process typically takes 6-8 weeks (from the time of application to funding). To apply, individuals must submit an application on SaaS Capital's contact page. The application process typically is made up of an introductory call, a review of the startup’s financials, and a follow-up call. Once a company is approved for funding, funds are typically disbursed within 1-2 weeks (Source - August 2022).
Capchase vs. SaaS Capital
In addition to financing using venture debt from SaaS Capital, founders and startups can work with Capchase. When compared to SaaS Capital, Capchase’s funding model is designed to remove excess fees that can save clients up to 50% when compared to traditional venture debt providers (Source – June 2022).
It can be helpful to see the differences between Capchase and SaaS Capital side-by-side. This is especially true for key areas like speed to funding, flexibility, structure & fees, and value add.
Speed
Capchase
24 hours to underwrite (led by a tech-driven & highly responsive underwriting system)
SaaS Capital
Often a 6 - 8 weel application and diligence process
Flexibility
Capchase
Highly Flexible: No traditional financial covenants on amounts financed
SaaS Capital
Somewhat flexible though there are requirements around customer retention rates and minimum deployment amounts
Structure & Fees
Capchase
Transparent & Simple: No prepayment fees, closing fees, warrants, or hidden fees
SaaS Capital
Terms around prepayment, expensive closing process, warrants, admin fees
Value Add
Capchase
A prescriptive funding plan
SaaS Capital
Discrete funding events
