Flytxt provides AI-powered solutions to help subscription and usage-based businesses to measure, monitor, and maximize their customer lifetime value with precision and ease. They specialize in the telecom, banking, and fintech industries, helping these companies gain a deep understanding of their customers and products, predict customers’ needs and wants, and take actions across CX workflows to build deeper, more valuable relationships. Their solution employs a patented customer lifetime value maximization AI that has been well-trained with trillions of real-world data samples from over a billion consumers.
Flytxt had leveraged venture capital funding to help achieve their growth goals and product development, but Sachin Rastogi, Chief Financial Officer at Flytxt, was looking for additional ways to expand their funding.
This desire to improve their access to working capital in order to improve business efficiency and grow revenue is why Flytxt chose to partner with Capchase.
Securing working capital seamlessly to remain cash flow positive
In 2021, Flytxt began thriving: “We began seeing massive growth,” said Rastogi. “We hit record numbers in terms of onboarding new customers.” However, due to the pandemic, Flytxt’s customers were facing multiple challenges that delayed many processes on their end . This in turn led to delays in the processing and collection of payments related to subscription contracts.
As a result, Flytxt experienced a shortfall in working capital for certain periods of time. “If you look at the last year holistically, we’re cash flow positive,” said Rastogi. “But if you break down the individual months, there are some where we really needed the support of external funding.”
Flytxt was committed to raising capital to remain cash flow neutral or, better yet, positive. But when they tried to go the traditional venture capital route, they discovered that the bar for investment was significantly higher than in the past.
Still committed to securing working capital, Flytxt explored alternative financing sources and discovered Capchase. Today, Flytxt uses about 25% of their funding from Capchase to ensure smooth working capital management to support their growing business.
“Immediately, one of the biggest differences with Capchase is that we no longer face challenges in acquiring and using capital. We can use our financing at our discretion to help tie us over low months as needed.”
Accessing the right amount of funding at a moment’s notice
As a CFO, one of the biggest challenges Rastogi faces is either having too much or too little borrowed cash. “It’s important to me that we run a very tight ship where I know exactly how much is in the bank and how it’s being managed—that’s essential for efficiency,” said Rastogi. To Rastogi, it was very important that Flytxt’s funding partner provided flexibility and transparency in how they could use their capital.
With Capchase, Flytxt can use their funding on their own terms, so they’re never left with too much money in the bank with nowhere to allocate it or too little and create negative cash flow.
“The ability to draw funding as needed was one of the deciding factors in choosing to partner with Capchase. And the process is so seamless, we don’t have to turn to multiple places to access our financing.”
A big factor in choosing Capchase was also access to a Growth Advisor 24/7 to answer any questions, help with draws, and understand the conditions of their funding agreement. “We have a seamless relationship with our advisor,” said Rastogi. “I know I can just drop her an email that we need to initiate a draw and the money will be in our account in a matter of days.”
Increasing revenue and preventing the need for additional investors
The improved access to working capital, which has allowed Flytxt to remain cash positive, has also enabled Flytxt to grow their business without the need to raise additional funding outside of Capchase. The terms of their funding allowed Flytxt to invest their money back into their business as per their needs.
Within a year of partnering with Capchase, Flytxt was able to grow their monthly recurring revenue (MRR) by 60%. Rastogi doesn’t feel hard-pressed to bring on additional investors to support the needs of the business. At this point, he’d only bring on investors as part of strategic initiatives unrelated to capital acquisition.
“Heading into 2023, we have a very sufficient buffer,” said Rastogi. “I don’t need any additional help to either sustain our current operations or for supporting our product growth and go-to-market plans.” Rastogi is excited to continue growing Flytxt’s relationship with Capchase in the upcoming year and partake in any new offerings that will benefit the business. “Capchase is a very valuable partner,” said Rastogi. “And I’m optimistic for the day that Capchase will expand their solutions so that we can meet all our financial requirements with them alone.”