Fintech Company Tapline Raises €31.7M in Pre-Seed Round

Tapline, a digital finance platform, has announced the raising of a €31.7 million round. The company offers technology companies operating under a subscription model a way to immediately exchange their future revenues for cash. Tapline provides both an alternative and an addition to the traditional method of raising capital, for which startups must offer investors shares.

Tapline has built a fintech product that allows it to bring customers to market quickly and provide customers with their own credit scores. In addition, Tapline customers have access to a free financial dashboard that allows them to monitor various business metrics on a daily basis. That is a comprehensive solution for SaaS companies that allows them to run their business more efficiently by analyzing key business metrics and quickly accessing liquidity.

The financing raised allows the Berlin-based team to operate in the exponentially growing SaaS market, where global transaction volumes are expected to reach €720 billion by 2028. The investment will also be used to develop the product and hire key people in the area of business development and platform capabilities.

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The company has managed to attract leading equity funds and also debt financing investors

Among them is British alternative asset management firm Fasanara Capital, which is providing €30 million in debt financing as part of the round. VC investors such as V-Sharp Venture Studio, Antler, Black Pearls VC, 365 fintech, Depo Ventures, Impetus Capital, and several angel investors are responsible for the remaining funding of €1.7 million.

“Access to capital for technology SMEs is a key factor for growth. In today’s challenging macroeconomic environment, it is important that there is a financing solution that can support these companies. That’s why we are pleased to support Tapline, in its mission to democratize access to capital for SMEs,” said Francesco Filia, CEO of Fasanara Capital

Tapline has a direct focus on the sector of SaaS companies operating in B2B and B2C models, the fast-growing startup market in CEE, and also in DACH. The choice of this market is not accidental. SaaS models offer a high level of predictability in terms of recurring revenue, which allows for precise risk analysis and the determination of guaranteed funding that a startup can receive. Tapline is able to provide startups with capital in less than 48 hours after registering on the platform.

SaaS companies generating recurring monthly revenues as low as €8,000 can finance their growth with Tapline. The startup can immediately convert up to 60% of its ARR (Annual Reccurring Revenue) into capital, which does not dilute the company’s shareholding structure. Tapline offers startups a six- or 12-month cash upfront at a discount to the future value of their revenue. In this way, startups can receive financing of up to €1 million, making Tapline a suitable tool not only for SaaS startups in the early stages of development but also for companies that are in more advanced stages of growth.

Importantly, with the current uncertain macroeconomic environment, the cost of capital is crucial for founders. Tapline provides SaaS companies with a transparent platform, offering a clear picture of their funding and its cost.

“Talking to many founders of technology companies who were raising growth capital from the VC market, it became clear to us that there was a need for an alternative financing solution that was transparent, easy to understand and offered competitive pricing without hidden costs. In building Tapline, we set out to provide a fast, transparent capital solution that doesn’t burden founders, so they can continue to focus on what they do best: building innovative companies. During the current economic uncertainty, our platform will allow SaaS companies to focus on growth instead of seeking funding,” says Dean Hastie, co-founder and CEO of Tapline.

The team behind Tapline

Tapline was co-founded in 2021 by Dean Hastie, Dmitry Miller, and Peter Grouev. The team met at the Antler program in Berlin where they were able to receive their first funding for business development. The founders have more than 25 years of experience in the key areas required for Tapline’s business model, namely capital markets, early-stage investing, investment risk analysis, as well as product development, and technology scaling.

Dean and Peter, originally from South Africa and Bulgaria, respectively, worked during the 2008 financial crisis at banking institutions Merrill Lynch, J.P. Morgan (US), and Sanlam Investments (South Africa). Their experience in risk, asset, and credit management makes them reliable partners to implement Tapline’s business model, especially in today’s economic environment.

“The current macroeconomic conditions are making it difficult for many companies to access capital. This also applies to many SaaS companies that have great products and growing revenues but still have difficulty raising capital to continue growing. Tapline addresses this need by offering not only a transparent solution that provides immediate liquidity but also an analytics platform that helps companies monitor their day-to-day operations, an important added value in today’s times. We believe that Tapline’s founders (Dean, Peter, and Dmitry) are the right team to address this market need with their interdisciplinary experience, combining competence from banking, risk management and also building technology products.” – says Alexander Dobrzyniecki, Partner at Black Pearls VC

Targeting the current market gap in liquidity for SaaS companies

According to CB Insights data, global venture capital funding totaled $74.5 billion in Q3, 2022, reaching its lowest level in nine quarters. The new level of funding also marks a 34% drop quarter-on-quarter, the largest percentage reduction in a decade. With a clear lack of liquidity in the startup market, Tapline’s product fits well with the need to provide capital as an alternative to VC funding and could become a key liquidity driver in the ecosystem of young technology companies.

The current macro environment is a major opportunity for companies providing liquidity to stably growing companies based on recurring revenues. The change in attitude towards this type of instrument is also noticeable on the part of startup founders, who are becoming more educated about this type of financial instrument, as well as its various use cases. Thanks to platforms such as Tapline, startup founders have an alternative financing option as part of their total capital.

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(Featured image by Tumisu via Pixabay)

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