Fintech Pipe, which aims to be the “Nasdaq for revenue,” raised $150 million in a funding round that valued it at $2 billion, according to a TechCrunch story from the end of March. More money is coming into Pipe as the popular fintech gets $250M at a $2B valuation.
Fintech Pipe, which aims to be the “Nasdaq for revenue,” raised $150 million in a funding round that valued it at $2 billion, according to a TechCrunch story from the end of March.
Now that the deal has been finalized, Miami-based Pipe has announced that it has secured $250 million at a $2 billion valuation in a round that, in the words of co-founder and co-CEO Harry Hurst, was “massively oversubscribed.”
Pipe 250m Series 2bazevedotechcrunch
He stated, “We initially Only $250 million of the $150 million that we had set aside for the round could be raised, data collected by pipe 250m series 2bazevedotechcrunch.
As we had mentioned, Greenspring Associates of Baltimore, Maryland, led the investment, which was also made by new investors Counterpoint Global of Morgan Stanley, CreditEase FinTech Investment Fund, Fin VC, 3L, and SBI Investment of Japan. Prior investors Next47, Marc Benioff, Seven Seven Six, MaC Ventures, and Republic also contributed to the most recent round.
Several well-known investors, including Jim Pallotta’s Raptor Group, Next47 at Siemens, Shopify, Slack, HubSpot, Okta, and Chamath Palihapitiya of Social Capital, gave Pipe $50 million in “strategic equity capital” a little more than two months ago. With this most recent round, Pipe has now raised more than $316 million in funding. The new cash exceeds the company’s earlier efforts to raise money.
As a journalist who first covered the company when it raised $6 million in first funding in late February 2020, it’s been great to observe Pipe’s development. Due to its capacity to reach a $2 billion value in less than a year following its open launch in June of last year, Pipe claims that it is the fastest fintech to ever reach this valuation. I am unable to verify that claim, but I can attest to its rapid and spectacular growth.
In September 2019, Hurst, Josh Mangel, and Zain Allarakhia created Pipe with the goal of providing SaaS startups with a mechanism to get upfront payments by connecting them with investors in a marketplace.
that compensates for the annual value of those contracts at a reduced rate. The members of the buy-side are described by Pipe as “a vetted group of financial organizations and banks.”
The platform’s goal is to give recurring income businesses access to financing so they won’t have to accept loans or run the danger of having their ownership stakes reduced as a result.
Pipe 250m Series Funding
According to Hurst, around 1,000 of the more than 4,000 organizations that have joined the Pipe trading platform since its March raising have done so since the site’s June 2020 opening to the general public. On the Pipe platform, which has tradable annual recurring revenue (ARR) that exceeds $1 billion and is increasing toward $2 billion, tens of millions of dollars are currently traded each month.
When I last spoke with the company in March, it said that tens of millions of dollars had been exchanged during the first quarter. This explains how we were able to raise money at such a high valuation and generate such a high level of investor interest. Growth, according to Hurst, “has been crazy.”
The platform of Pipe has grown over time to currently offer non-dilutive financing to non-SaaS companies as well. By the end of the year, according to Hurst, more than 50% of its customers—up from the current 25%—will not be SaaS.
Hurst cites a few examples of businesses using Pipe’s platform today, including property management companies, direct-to-consumer enterprises offering subscription services, insurance brokerages, online pharmacies, and even organizations involved in sports and entertainment. Even VC firms use it.
According to Ashton Newhall, managing general partner at Greenspring Associates, Pipe is “one of the fastest-growing firms” he has ever seen.
The business “is attacking a very enormous TAM (total addressable market) with the potential to dramatically disrupt the financial services industry,” he stated.
In particular, Pipe’s alternate finance plan piqued Greenspring’s curiosity.
While many companies offer standard credit solutions for specialized niches, Newhall made it clear to TechCrunch that Pipe is not a lender. Instead, it serves as a platform for trading and doesn’t actually bring in money to pay clients. To obtain the best potential pricing to trade their actual contracts, Pipe connects consumers with institutional investors directly in place of obtaining a loan.
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Faqs
— (Reuters) Pipe, a startup that offers a platform for businesses to sell their recurring revenue streams, announced on Wednesday that it has received $250 million at a $2 billion value.
More than 8,000 businesses have registered on the Pipe trading platform, and non-SaaS vertical markets like direct-to-consumer (D2C) subscriptions, property management, streaming services, and service-based businesses like gyms and pest care account for more than 50% of trading traffic.
Key Learnings. When an institutional or accredited investor purchases stock directly from a public firm at a discount from the market price, this is known as private investment in public equity (PIPE). PIPEs help businesses save time and money and raise money more quickly than public offerings since they are subject to fewer regulatory constraints.
According to PlacementTracker, Wellington Management and Pacific Corporate Group were the two biggest PIPE investors among mutual funds and pension funds in the past year as of November 1 with each having over $100 million invested. Other names on the list include more well-known ones. Among them is Janus Capital Corp.
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