Los Angeles-based trading platform Pipe announced Tuesday that it raised $50 million in strategic equity financing in a round co-led by Raptor Group and Next47.
Pipe launched in beta early last year as a trading platform for SaaS companies. Pipe works with companies that want to access their booked revenue up front by turning their quarterly or monthly recurring revenue (MRR) into annual recurring revenue (ARR) cash flow, according to the company.
Since its public launch in June, the platform has been adopted across companies in multiple industries. Pipe has since added streaming services, telecommunications services and direct-to-consumer businesses to its growing list of clients. All told, over 3,000 companies have signed on to the trading platform and tens of millions of dollars have been traded on the platform this year alone, according to the company.
“Prior to Pipe, when raising capital, founders only had two primary sources of financing, neither of which is always ideal: selling equity or taking on restrictive debt,” Matthew Cowan, general partner at Next47, said in a statement.
Pipe treats recurring revenue streams as an asset. Doing so enables companies to transform their recurring revenue into upfront capital. The company ultimately aims to increase cash flow for entrepreneurs so that they can scale their business without debt or dilution.
“We felt it made sense to have the broader ecosystem that powers growth-oriented companies join forces to invest together in the future of revenue as a tradable asset class,” Harry Hurst, co-founder and co-CEO of Pipe, said in a statement.
Pipe plans to use the additional capital to further new partnerships as the company expands globally.
Additional investors Shopify, Slack, HubSpot and Okta participated in the round, which also included financial backing from Salesforce CEO Marc Benioff and Reddit co-founder Alexis Ohanian, among others.
Pipe has raised $66 million in venture capital financing to date.
