Tapline has secured €31.7 million in equity and debt in a pre-seed funding round.
Out of the total, debt funding of €30 million ($33.5 million) was provided by Fasanara Capital. The remaining €1.7 million ($1.8 million) equity round was led by the V-Sharp Venture Studio and several other venture capital (VC) investors.
Founded in 2021, Tapline has developed a digital finance platform that helps startup founders in the software-as-a-service (SaaS) space access funding. The company is focused largely on the DACH (Germany, Austria and Switzerland) and Central Eastern Europe markets.
Rather than exchanging equity for capital, Tapline enables businesses to trade a share of their future recurring revenues for cash and borrow against future earnings.
“We listened to the fundraising pain points in the market, and it was clear that an alternative financing solution that is transparent, easy to understand, and offers competitive prices with no hidden costs was required,” Dean Hastie, the co-founder and CEO of Tapline stated.
“Many outstanding SaaS companies have a proven product and a growing customer base, but they need additional funding to fuel further growth. Unfortunately, for companies not suitable for or not wanting to raise venture capital, there hasn’t been a suitable form of financing in our region to take their business to the next level and allow them to keep innovating,” said Matej Zabadal, managing partner of V-Sharp Venture Studio.
He added that “Tapline, with its non-dilutive financing solution, perfectly fits this need.”
Tapline is not the only firm to see potential in the SaaS lending market.
For example, when PYMNTS spoke to James Hickson, founder and CEO of the lending platform Bloom, he also highlighted that the relative predictability of SaaS revenues makes them ideal candidates for revenue-based financing.
Echoing Hickson, Julien Zerbib, the CEO of French FinTech lender Unlimitd, noted that roughly three-quarters of the firm’s clients are subscription-based businesses, and he said that revenue-based finance could drive significant growth for the recurring revenue model.
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