Before we go any further, that’s recap that shall we? Berlin-based fintech re:cap has raised $111.5 million in a seed funding round. Now it’s not all pure cash, as the startup reports that the funding round is comprised of both growth capital and liquidity components. Basically, a funding round based on what the startup itself actually does. In a nutshell, re:cap provides companies with a demonstrable annual recurring revenue stream the ability to convert up to 50% of this ARR into instant upfront cash, all without dilution. Prior to this round, re:cap had raised €1.3 million in pre-seed funding.
Along the lines of what Madrid’s Ritmo, Amsterdam’s Requr, and Milan’s Viceversa have on tap, re:cap offers rapidly growing startups access to capital, thereby keeping the tanks full to sustain their trajectory without the headaches of debt financing or dilutive equity raises.
The process involves an opening of the books to re:cap (i.e. connecting to a company’s existing infrastructure via a series of APIs), whereby a presumably AI-based algorithm assesses the financial strength of a startup, and either approves or declines an application within 48 hours. Based on revenue performance, re:cap’s financing terms evolve over time as a startup grows and establishess a “good customer” track record.
"Our funding platform will revolutionize the way software companies finance themselves today. But focusing on software companies is just the beginning: all financing solutions can be rebuilt with the information available in the digital age. Our ambition is for re:cap to become the European champion in this category," commented co-founder and CEO Paul Becker.
Re:cap’s pre-seed round concluded in May of this year, and since that time the company has grown in size to a team of 15 with a roster that includes former executives from Google, Solarisbank, N26, and NIBC.
"re:cap’s speed of execution in their first months has been tremendous. Both their financing solution and their technology with fully automated underwriting and transaction processing are setting standards. Based on their experience and expertise, the team around Paul and Jonas brings all the prerequisites to build a European category leader," concluded Felix Capital’s Joseph Pizzolato.