Venture Capital (VC) is an important and growing part of Europe’s investment ecosystem. The VC industry is instrumental in bringing jobs, innovations, growth, and world-leading companies like Adyen, Spotify across the continent. The core mission of Venture Capital is to reduce barriers for SME’s that wish to access financing.
Currently, VC firms are on the rise, and there is certainly no exception in Europe. One such VC is Round2, a growth-stage investor in leading digital scaleup companies in Europe.
Closed €30M funding
Recently, the company announced the closing of another round of fundraising, taking its assets under management to close to €30M. The funds were raised from existing as well as from new investors.
Based out of Vienna, Round2 Capital Partners is a growth capital investment firm that invests in small and medium-sized businesses through non-dilutive revenue-based loans, with a predominant focus on SaaS and innovative Hardware/Software combinations.
Revenue-based financing
Revenue-based financing is a simple type of funding in which a company receives funding in exchange for a share in its future revenue until a pre-defined absolute amount – the cap – is reached.
Unlike rigid repayment plans of bank loans or venture debt instruments, the Austrian company offers repayments in revenue-based finance, and, therefore, tied to monthly revenue. This enables the repayments to adapt to cash flows – increases when revenues are strong, and goes down when revenues are weak.
As per the company, revenue-based financing is a quantum leap forward in the way the growth of digital business with high gross profit margins and low working capital requirements such as B2B SaaS firms is funded. Building on recurring revenues the funding solution is not only transparent but also highly flexible and simple to implement. Founded by Christian Czernich, and Jan Hillered in 2017, the Austrian company has local hubs in Berlin and Stockholm.
The firm also manages Round2 Lab, which is a European program for young companies in their scale-up phase. It claims that so far more than 20 ventures from four countries have concluded the Round2 Lab, many of them having successfully scaled their business, raised more capital and closed profitable exits. Due to the Covid-19 restrictions, the third iteration of the program has been postponed to 2021.
Main image credits: Round2