Add another player to the revenue-based, non-dilutive financing game, as London/Berlin-based Vitt emerges from stealth today and has announced a $15 million (equity and debt) pre-seed funding round. The platform provides SaaS companies the option of raising growth capital based on annual recurring revenue streams, an attractive offer to traditional means of either restrictive debt or dilutive equity funding rounds.
With a baseline of a demonstrable ARR of £100,000, high-growth SaaS businesses simply need complete a 5-minute application process that includes connecting the company’s accounts to Vitt’s systems. From here, Vitt’s proprietary data model then evaluates core metrics including churn and growth and can deliver a yay or nay in less than 24 hours.
To recap: Vitt - approval in less than 24 hours, re:cap - approval within 48 hours, Ritmo - approval within "up to 24 hours", Requr - "within hours", and Viceversa - up to 72 hours.
If an application is successful, Vitt offers can offer a startup 12-months of upfront cash at a small discount against the expected value of the cashflow. The “discount” is the key to Vitt’s revenue model. An example: If a SaaS subscription model is based on a monthly fee of $10 ($120 annually), Vitt provides $115 upfront, netting the company $5.
“During my three years in Venture Capital, I became acutely aware of how limited the ‘VC product offering’ was for entrepreneurs. Not only is it slow – a multi-week, C-level intensive exercise – but it is incredibly costly,” explains co-founder and CEO, and seasoned venture capitalist, Saket Kumar. “Selling equity short-changes both founders and early employees who do the work and take the real risk. Company value should be owned by value-creators, not capital providers.”
Vitt’s $15 million pre-seed round was co-led by Better Tomorrow Ventures and SpeedInvest, and saw participation from Village Global, Entrepreneur First, Zayn Capital, and an assortment of angel investors including the founders of Wayflyer (Aidan Corbett), Comply Advantage (Charles Delingpole), Peakon (Phil Chambers), Choco (Daniel Khachab).
“Vitt brings a much-needed addition to the early-stage financing landscape in Europe,” commented Better Tomorrow Ventures’ Jake Gibson. “In addition to creating a valuable product for a customer that was previously limited in its choices when it came to raising capital, the rapid digitization of the economy has meant a rise in smaller opportunity businesses that use SaaS models but aren’t viable for venture investors. Vitt provides a fantastic alternative for these companies and one that sets itself apart from competitors and incumbents.”