- The German-based digital funding marketplace for SaaS companies, Tapline, which is co-founded by the Bulgaria-born Peter Grouev, raises a €31.7M pre-seed debt and equity round.
- The investment combines €30M debt financing from the UK alternative asset management company, Fasanara Capital, and €1.7M equity financing from the Czech V-Sharp Venture Studio. The equity round is also joined by Antler, Impetus Capital, Black Pearls VC, 365 fintech, Depo Ventures, and several business angels.
- Tapline will use the funding to increase sales and marketing efforts and accelerate product development by hiring people for key product positions.
“Tapline addresses a significant pain point for growing enterprises. The company provides financing in the critical period between funding rounds. This allows businesses to maintain and even accelerate growth until they receive the next financing round, simply against their recurring revenues. In this, Tapline’s strategy aligns with IMPETUS’ vision – we need to reduce friction in companies wherever possible. The lack of sufficient financing of growing start-ups is the top reason for their failures. Tapline’s product gives access to liquidity for growing companies in CEE and benefits IMPETUS’ equity portfolio companies in particular,” Viktor Manev, Partner at IMPETUS Capital, comments for The Recursive.
With a promise to allow SaaS companies to fund up to 60% of their annual recurring revenue upfront in less than 2 days, Tapline enables businesses to stay resilient in the current unstable economic climate by transforming their subscriptions into liquid capital. To date, the company has made €100M in SaaS finance requests and has accomplished 100% successful pilot trades.
“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,” says Dean Hastie, Co-founder, and CEO.
Founded in 2021 by Dean Hastie (CEO), Peter Grouev (Chief Investment Officer), and Dmitrij Miller (CTO), Tapline targets both B2B and B2C subscription-based companies from the DACH and CEE markets.
According to Francesco Filia, CEO of Fasanara Capital, access to capital is the key driver of growth for digital SMEs, and therefore, financial solutions such as that of Tapline could be vital for them in the difficult macroeconomic environment. Matej Zabadal, Managing Partner of V-Sharp Venture Studio also stressed the importance of alternative financing solutions.
“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 (non-equity type of financing that does not break down the cap table of a company) perfectly fits this need,” he says.
How does Tapline fill in the SaaS capital liquidity gap?
The big shrink in venture capital funding globally already shows – in Q3 of 2022 VC funding totaled $81B, down by $90 billion (53%) year over year and by $40 billion (33%) quarter over quarter. The timing is right for Tapline’s product to fill in the financing gap and become a key liquidity contributor to the European startup ecosystem.
The fintech solution of Tapline allows SaaS companies to trade their future subscription revenues for upfront and non-dilutive cash. The startup charges 1% on the trading value with no equity dilution or collateral required.
Tapline allows SaaS businesses, which have as little as €8k MRR (monthly recurring revenue), to fund their growth by trading up to 60% of their annual revenues into instant, non-dilutive capital. As the platform offers funding of up to €1M, the offering is suitable not only for SaaS startups but also for later-stage companies.
The team behind Tapline
Together Dean Hastie, Dmitrij Miller, and Peter Grouev bring over 25 years of background in capital markets management, early-stage venture investing, and product development.
Peter, who is originally from Bulgaria, and Dean who is from South Africa, worked through the financial crisis of 2008 at banking institutions Merrill Lynch, J.P. Morgan (USA), and Sanlam Investments (South Africa). Having seen what happens in the investment world during an economic crisis, they are not implementing and digitizing their lessons learned in the development of Tapline.
The co-founding team met at an Antler residency in Berlin and in 2021, the early-stage VC firm Antler backed their idea.
“As a leading global early-stage investor, we look at a founding team’s strong domain expertise, clarity of vision, team cohesion, and dynamics as well as their ability to execute quickly. The Tapline team exceedingly ticks all these boxes and we are very excited to be part of their journey of bringing an innovative and well-differentiated solution to the revenue-based finance market,” Christoph Klink and Alan Poensgen, Partners at Antler, comment.
The future of alternative financing in Europe
With a total size of 8 people, Tapline has employees from Germany, Bosnia, Lebanon, and Spain. The company has secured partnerships with CODAT, an accounting integration, as well as GoCardless (Previously Nordigen) for banking integrations.
“As of today, and going into 2023, we do not foresee expanding outside of the EU. However, with our mission of becoming the largest emerging market subscription economy financier in 5 years, we still start the building blocks of expansion outside the EU late next year. We are also keeping a close eye on Africa,” Dean Hastie shares.