Levenue, a European investment platform based on companies’ recurring revenues, announced an €8 million Series A round led by Truffle Capital, with the participation of Freshmen Fund. Until then, the founders had opted to bootstrap, in other words, to retain full control over their capital.
“The acquisition of Cake was an opportunity to raise funds. The reason why funds entered our capital is because they were already Cake shareholders,” confides Benjamin Rieder, CEO and co-founder of Levenue. Indeed, Cake was acquired via a share swap. Truffle Capital, Freshmen Fund, and the fifty or so business angels (via a holding company) who were Cake shareholders are now Levenue shareholders.
Read more about the acquisition of Cake by the fintech company Levenue and find the most important financial news of the day with our companion app Born2Invest, available for free.
With the acquisition of Cake, Levenue improved its valuation method
Levenue is aimed at companies with a subscription-based business model. The platform enables them to obtain immediate, non-dilutive financing by selling their future, recurring revenues at a reduced price to institutional investors.
“Founders of SMEs with subscription-based business models need new solutions to support their growth. The complexity, time, and effort required to finance companies by traditional means can be detrimental to the business, as it disperses the founders’ efforts, sometimes leading to their downfall,” commented Patrick Lord, Senior Partner at Truffle Capital.
Growing steadily and profitably since its launch in 2021, Levenue has provided over €200 million in financing to innovative companies. “Up until this summer, we were experiencing strong growth, but we reached a sticking point: the work involved in manually analyzing bank data required too many human resources,” explains Benjamin Rieder. The founders began looking for ways to build a technology that would enable them to analyze this data, before realizing that it already existed. “We came across Cake’s solution, which would enable us to scale through technology without increasing the number of people,” says Benjamin Rieder.
It was a happy meeting since Cake was looking to open a new chapter. “Initially, Cake focused on cashback and rewards programs, a niche that was becoming a little blocked. Putting Cake’s technology at the service of Levenue’s activities opened up access to a much deeper market,” comments Patrick Lord.
Cake has developed an open banking and data enhancement technology, which enables Levenue to improve its model by enriching each line with a company’s banking data, with the aim of building a realistic replica of its income statement. This will enable Levenue to provide more accurate risk profiles, faster funding decisions, and greater security for the platform’s investors.
Levenue to be launched in France in early 2024
Levenue currently operates profitably in twelve countries across Europe. “In the beginning, we invested a lot, particularly in the legal side, but we were soon able to break even thanks to the business. We operate like a marketplace, and our business model enables us to recoup commissions from both investors and the companies we finance,” shares Benjamin Rieder.
The startup intends to continue its European expansion and will be launched in France in the first quarter of 2024.
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First published in Maddyness. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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