New York-based Capchase, a foremost provider of financing solutions tailored for Software-as-a-Service (SaaS) companies, announced today a significant milestone in its 2021 initiative dedicated to supplying non-dilutive capital to women and minority-led startups.
Over the last two years, the company has successfully deployed more than $100m to these underfunded groups. Capchase has used its unique AI technology to accelerate the speed at which the funds were disbursed.
The achievement comes at a time when the share of funding for founders identifying as women or people of colour is dishearteningly meagre. The economic slump in 2022, which caused venture investment to plummet by over 50%, only worsened the disparity. In the U.S., only 2% of total venture capital funding during 2022 was allocated to women-founded startups, with minority-founded companies receiving a mere 1.8%. This problem extends beyond the U.S.; in Europe, teams comprised solely of women secured just 1% of total capital in 2022, while minority-founded startups raised 0.7%.
Capchase, the growth ally for ambitious SaaS and similar recurring-revenue companies, aspires to bring future anticipated cash flows to the present, offering funding that is swift, flexible, and doesn’t dilute ownership. Since its establishment in 2020, Capchase has collaborated with more than 4,000 businesses and partners, making $2bn in funding available to the SaaS sector.
The $100m investment aims to address the funding shortfall for underrepresented founders. The plan is driven by Capchase’s data-based approach to providing revenue-based financing, which enables the company to support brilliant women and minority founders without the inherent bias typically found in traditional funding processes.
Capchase co-founder and CEO Miguel Fernandez said, “We all have a role in improving equality in the technology industry and providing women- and minority-founders with the funding they need to grow is one of the areas where we knew we could help. At Capchase our data-driven approach to providing revenue-based financing gives us the ability to support brilliant women and minority founders without the inherent bias typically found in traditional funding processes.”
Despite facing numerous challenges, these founders have shown to be successful entrepreneurs. For instance, female-founded startups maintained a lower median burn rate than male-founded startups — a key indicator of startup health, longevity, and growth when capital is harder to come by.
Capchase will persist in its support for female and minority-founded startups, using its technology that determines eligibility and draw amounts based on applicant startup fundamentals and scenario analysis.
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