Today marks three years since Capchase was founded. Since our launch on May 11, 2020, the world has been through a whirlwind of changes—a once-in-a-century pandemic, rising inflation and corresponding interest rates and, most recently, the collapse of some long-standing financial institutions. All this led to volatility in capital markets and, in many industries, a sharp correction.
The SaaS world, and startups as a whole, have experienced the downturn acutely, and have had to shift strategies for funding and growth. We’re proud that we’ve been able to help thousands of companies access the capital they needed to continue to grow, innovate, and create future-shaping products during these challenging times. In total, we’ve:
- Made over $2 billion in financing available to SaaS businesses
- Extended our customers’ runways by an average of 7 months each
- Helped our clients boost their growth rates by an average of >110%
We’re also proud of our own milestones: raising over $900 million (in a combination of debt and equity), being named one of Fast Company’s most innovative companies, and growing our team to 130 amazing people across 30 nationalities.
Introducing Capchase Pay
But it was never our intent to only provide alternative financing to founders—we’ve always had a grander vision in mind.
We’re thrilled to announce the launch of our newest product: Capchase Pay.
What is Capchase Pay?
Capchase Pay is a B2B BNPL (buy now, pay later) solution designed specifically for SaaS businesses who sell—or want to sell—through long-term, annual contracts.
Capchase Pay acts as a financier for buyers who wish to purchase and access a SaaS product immediately, but pay for it over time instead of upfront.
While the buyer gets to pay in flexible installments, Capchase Pay gives vendors the full contract value upfront, (net a small fee) immediately after the deal closes. This makes the product more affordable for the buyer, and helps increase total conversions and revenue for the vendor—a win-win for everyone involved. Plus, all billing, collections, and reconciliations are eliminated: Capchase handles that directly with the buyer.
On the product side, we’ve built vendor and buyer portals to streamline the sales and payment process. We’ve also integrated seamlessly with Salesforce and Hubspot. In the vendor portal, sales teams can create and track deals funded with Pay and generate custom payment links that include the terms and payment schedule of every contract. In the buyer portal, buyers can easily submit payments to Capchase directly using bank transfers or credit cards.
Why we built Capchase Pay
We first started Capchase with the goal of providing better access to capital for the SaaS industry, which was typically underserved by traditional financing. Capchase Grow, our non-dilutive financing product, became our core offering: providing fast and flexible funding against a company’s ARR.
Now, we’re excited to update and expand on that mission by adding financing and payment solutions at the point of transaction: Capchase Pay is a sales-enablement tool that can be used alongside revenue-based financing in a SaaS company’s growth stack.
Our final vision is to automate the entire workflow of closing SaaS transactions—ultimately accelerating all stages of revenue generation.
Why does the SaaS world need BNPL?
According to our data, the average SaaS sales cycle has increased by 24% and LTV/CAC is 2x lower in 2023 than it was in 2022. Runways have reduced by an average of 17% between 2021 and 2022, while VC funding declined by 35% from 2021 to 2022.
Investors and VCs are tightening their purse strings and demanding better margins, and as a result companies are slashing their budgets. The appetite (and resources) to buy new tools that require expensive, lengthy contracts that need to be paid upfront just isn’t there any more—so sales cycles are slowing down, or even grinding to a halt.
How Capchase Pay helps
Capchase Pay can help SaaS companies overcome many of these issues by providing the following key benefits:
- Accelerating sales cycles: By making SaaS product payments more affordable, buyers can more easily commit to higher-value deals, which helps account executives close deals faster. For example, one beta customer, CIENCE, was able to halve its sales cycle from 4 to 2 weeks.
- Converting more prospects and renewals: Because Capchase Pay removes the financial barrier of a high upfront cost from long-term contracts, it allows a much wider net of customers to convert—and promotes renewals. Another customer, IOTAP, was able to win deals that may not have otherwise closed thanks to flexible payment terms from Capchase Pay.
- Automating—or eliminating—billing and collections: Capchase Pay takes care of all billing and collections so you don’t have to, which frees up finance and ops teams’ time to focus on more important strategic initiatives.
- Increasing cash flow and access to working capital: By allowing vendors to get paid the full contract value upfront, Capchase Pay can increase cash flow and immediate access to working capital. Within just one month of using Pay, some customers have been able to reduce their time to cash from 15 days to same day, triple their number of deals closed, and generate up to $3.7 million in new revenue.
- Giving time back to grow your business: With increased cash flow, less time wasted on manual billing and collections tasks, and more customers, the bottom line is that Capchase Pay gives you more money and time to focus on growing your business.
We’re continually impressed by the resilience and tenacity of our partners in the SaaS community, and have appreciated the opportunity to help so many companies learn, innovate, and grow over the past 36 months. Capchase Pay is one more way we hope to support the community and help founders, leaders, and dreamers build the future.
Capchase Co-Founder and CEO