Berlin-based Tapline, a digital funding marketplace that allows SaaS companies to trade their future revenues for upfront and non-dilutive cash, announced on Thursday that it has raised €31.7M in a pre-Seed round of funding.
Tapline says it will use the funds to tap into the exponentially growing SaaS market, where global transaction volumes are set to reach €720B in 2028. The funds will also be used to enhance the Tapline solution and hire key individuals around marketing and product.
Investors in the round
The investment includes €30M in debt funding from Fasanara Capital, a UK-based alternative asset management company with more than $3.5B in assets under management. The remaining €1.7M was raised as an equity round led by the Czech VC firm V-Sharp Venture Studio, alongside Antler, Black Pearls VC, 365 fintech, Depo Ventures, Impetus Capital, and several business angels.
Francesco Filia, CEO of Fasanara Capital, says, “Access to capital for digital SMEs is a key driver of growth. With today’s difficult macroeconomic environment, it’s essential there is a financial solution that can support these companies. This is why we are happy to support German-based Tapline, with their mission of democratising access to capital to digital SMEs.”
Fundraising pain points in the market
According to a report from CB Insights, venture capital worldwide fell to a nine-quarter low in Q3’22, reaching $74.5B. The new funding level constituted a 34 per cent decrease from one quarter to the next, which was the biggest quarterly percentage decrease in 10 years. Tapline’s solution couldn’t have come at a better moment as a critical liquidity provider to the startup ecosystem, given the obvious shortage of liquidity in the market, even for “great” firms.
The current macro environment also offers a new and exciting beginning for revenue-based financing, particularly because founders are becoming more knowledgeable about the instrument and its many use cases – having an alternative finance option in their overall capital stack and not readily giving up priceless equity easily.
Tapline has developed a fintech platform that enables quick client onboarding, offers customers a tech-enabled credit score, and gives them access to a free financial dashboard that lets them regularly track various metrics of their business daily. The fintech company claims to serve as a one-stop-shop for SaaS clients to manage their businesses more effectively by providing access to liquidity and important business metrics for free.
Co-founder Dean Hastie says, “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. Ultimately, we can provide a quick, transparent, and non-dilutive capital solution to founders, so they can continue to focus on what they do best: building innovative businesses. During the current economic uncertainty, our platform will allow SaaS companies to continue focusing on growth.”
Finance on demand for early and late-stage companies
Tapline is focused on the SaaS sector across both B2B and B2C business models, particularly in the DACH and fast-growing CEE market. SaaS models provide high levels of recurrent revenue predictability, enabling precise financial underwriting.
According to Tapline, SaaS businesses can finance their expansion by converting up to 60 per cent of their annual recurring revenue (ARR) into immediate, non-dilutive capital with as low as €8K in MRR (monthly recurring revenue). After a customer has been onboarded, Tapline can distribute funds in less than 48 hours.
Startups can get 6 or 12 months of upfront capital from Tapline at a reduced rate compared to the estimated future worth of their sales. Funding of up to €1M is offered to make this solution suitable not only for SaaS startups but also for later growth-stage companies.
Matej Zabadal, Managing Partner of V-Sharp Venture Studio, says, “There are many outstanding SaaS companies that have a proven product and a growing customer base, but they need additional funding to fuel further growth. For companies not suitable for or not wanting to raise venture capital, there hasn’t been a suitable form of financing in our region for them to take their business to the next level and allow them to keep innovating. Tapline with its non-dilutive financing solution perfectly fits this need. In addition, Tapline has an amazing founder-product fit with Dean, Peter and Dmitrij, so the investment was a no-brainer for us.”
The Berlin-based startup was founded in 2021 by Dean Hastie, Dmitrij Miller and Peter Grouev. Tapline’s team met at an Antler residency in Berlin. The Day zero investor and global early-stage VC firm invested in Tapline in September 2021.
Dean Hastie and Peter Grouev, originally from South Africa and Bulgaria respectively, worked through the financial crisis of 2008 at household banking institutions Merrill Lynch, J.P. Morgan (US), and Sanlam Investments (South Africa). Given the current economic environment, the team’s expertise in risk management, fixed-income asset management, and credit makes them a trustworthy collaboration to implement Tapline’s business strategy.