Efficient Capital Labs Secures $7 Million in Funding Led by QED Investors

Efficient Capital Labs (ECL) has closed a $7 million funding round led by QED Investors.

Founded in early 2022, the startup provides business-to-business (B2B) software-as-a-service (SaaS) companies access to upfront capital from its balance sheet, allowing an efficient and cost-effective way to access capital, according to a Thursday (July 13) press release.

“Our vision is to enable border-agnostic access to capital for businesses in emerging markets, such as India, that can benefit from lower capital costs that are available in markets such as the U.S.,” ECL Co-Founder Kaustav Das said in the release.

ECL charges a fixed fee of between 9% and 12% of the upfront capital it provides, and customers use ECL to fund their pre-seed, seed and Series A startups, TechCrunch reported Thursday.

With 43 current SaaS customers and more than $13 million originated in loans, ECL does dual risk assessment in both South Asia and Southeast Asia, the report said. By providing nondilutive capital to the companies, and doing so affordably, ECL is empowering founders to build for the long-term, per the report.

Sandeep Patil, QED Investors partner and head of Asia, said in the press release: “Indian SaaS companies are known for innovative and specialist software solutions, and their growth in selling to the U.S. represents a new era of entrepreneurship and global collaboration.”

This funding round comes at a time when venture capital (VC) spending in the U.S. has dropped by almost half for early-stage startups. In the second quarter of 2023, American investors backed 3,011 startup deals, which is a third fewer than the same period in 2022, Bloomberg reported July 6, citing Pitchbook data.

The total amount spent by VC firms was just under $40 billion, which is close to half of what was spent last year. The largest drop in funding was seen in angel or seed deals for startups in the concept phase.

Larger startups that are closer to going public fared slightly better, with investors funding 210 deals in the U.S. during the second quarter. However, many of these deals were smaller extension rounds aimed at raising cash while maintaining higher valuations.