Re:cap, a German revenue-based financing startup, raised $14.6 million using this 13-slide pitch deck
- Re:cap has raised $14.6 million in Series A funding to expand its team and SaaS platform.
- The Berlin-based startup offers a proprietary platform for data-driven credit decisions.
- The funding will help Re:cap expand its product offerings.
Re:cap, a German revenue-based financing startup, has raised $14.6 million in Series A funding.
Founded in 2022, the Berlin-based company offers a proprietary software platform that helps businesses connect with investors. The platform uses data to help with credit decisions and financing availability. Borrowers can use financing on re:cap to borrow up to 5 million euros, or about $5.5 million, over terms of up to five years. The company partnered with HSBC Innovation Banking — the acquirer of SVB's European assets following the bank's demise — to offer longer-term products.
Debt-based lending via revenue-based financing has been a tough model in recent years, as margins became tighter for companies due to fears of recession, higher inflation hitting consumer spending, and increased interest rates.
"Overall, the private debt market is growing tremendously, faster than most if not all alternative asset classes, so the opportunity generally is huge," Paul Becker, CEO and cofounder of Re:cap, told Business Insider. "Looking at the hype in the startup world, which started roughly three years ago, things have changed a bit. Today, you can see that some players were just jumping on a trend, whereas we took things very seriously from day one."
Re:cap told BI its focus on data will help it avoid similar issues to its competition.
Re:cap has brought in funding from Entree Capital, alongside existing investors Felix Capital and Project A. Becker told Business Insider that his existing investors wanted to lead the funding round, given the wider market for fintech funding, which has been arduous and could be overly time-consuming.
According to Atomico, funding for European startups dropped by 45% year-on-year to $45 billion in 2023, but investment in European fintech dropped well below the wider slump. According to Finch Capital, funding for fintech startups declined 70% to $5 billion in the first half of 2023 from $17.1 billion compared with the same time in 2022.
"Of course, going out for fundraising has its advantages, but in this case, the upside of keeping the group of investors as it is, having a fast process, and focusing on building the business was better," Becker added.
The funding will double the company's team to around 80 employees by the end of 2025. The company will also expand its SaaS product, which offers cash flow management tools to funds such as Channel Capital and Avellina Capital.
Check out Re:cap's pitch deck below: