Customer Stories

How Fondo tripled their ARR and team through predictable, transparent funding

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Fondo is an all-in-one accounting platform for startups, specifically geared to founders in early-stage companies. “Startups are required to file taxes each year, and this requires that their books are in order,” said David J. Phillips, Founder and CEO at Fondo. “If founders don’t have an accounting background or an in-house financial team, it’s a bit of a black box and can take significant time and money—we’re here to handle the headache, while helping to secure your startup’s tax refund.”

Fondo was born out of a pivot from a previous company that Phillips founded. He had raised pre-seed funding, but by the time he shifted to Fondo there was no funding left. Even though Fondo had generated revenue since day one, it still wasn’t enough to fund the exponential growth they were looking to achieve. As a result, Phillips set out to find additional financing, which is how he discovered Capchase.

With Capchase, Fondo has been able to increase their ARR, expand their team, and predictably model their growth goals. 

Finding funding alternatives with better terms

Before Capchase, Fondo had to operate as a profitable business because they had no funding to rely on. “We’ve always been bootstrapping Fondo with just the cash flow from our customers,” said Phillips. This meant that they were not able to significantly invest in hiring, product development, and go-to-market motions because they couldn’t expand their business beyond their profits. 

With only $900k in revenue, Phillips wasn’t sure how he was going to be able to scale Fondo. He was considering pursuing traditional funding, but was hesitant. “I grew my previous company, Hackbright, to $4 million in revenue,” said Phillips. “And when we went to a more traditional institution for funding we were only given max financing of $250,000.” Convinced Fondo would receive even less funding, Phillips sought out alternative financing options and discovered Capchase. 

The first line of credit Fondo received through Capchase was even larger than the one he had been offered at his past company—and with better terms. Phillips had much more flexibility over where and how he could invest his funding back into his business. 

“I think Capchase could fully provide an alternative path to grow and scale Fondo without the need for venture capital."

Unlocking growth at scale

With funding from Capchase, Phillips is finally able to make key business decisions without worrying about whether or not he has the resources to do so. “What Capchase has enabled us to do is operate like a well capitalized startup where we don’t have to focus on immediate profitability,” said Phillips. “Instead we can focus on growth that will set us up for long-term success.”

Fondo has now been able to hire essential leadership roles, and invest in their engineering, product development, and customer success teams. They’ve been able to focus on providing a great customer experience and building a better product offering to help retain their current customers, while drawing in new prospects. 

As a result of these investments, Fondo has grown their team from 20 to 66 employees. They’ve also more than tripled  their ARR, growing from $900,000 to $3 million, and increased their year-over-year growth by 12%. “I’m proud of our 2022 performance—we solved a painful problem for nearly 500 startups and achieved top decile ARR growth,” said Phillips. “These kinds of outcomes in this short of a timeframe are usually only possible through VC funding.”

Achieving peace of mind through transparency and predictability 

Given Phillips’s aggressive growth goals, it was key that he not only accessed substantial funding, but accessed it quickly. 

When working in the past with more traditional funding partners, Phillips felt he was in a constant cycle of pitching and presenting to investors and potential investors to access capital. 

“Once we signed with Capchase, it was a matter of one kick-off call with our Growth Advisor and sending over our financials to access our first draw,” said Phillips. “And accessing additional draws is as simple as the click of a button.”

The open communication with his Growth Advisor plays a large role in Phillips’s confidence in Capchase as a funding partner. As part of their funding agreement, Capchase gives Fondo guidelines of the milestones they need to hit in order to keep their current line of funding and even grow it in the future. “The way our Growth Advisor proactively communicates what goals we need to achieve is incredibly helpful—no VC is ever going to give us that transparency and commitment,” said Phillips. “I feel like Capchase is really in my corner and that they’re invested in my company succeeding.”

Because Phillips does not need to spend his time in constant meetings trying to secure funding, he feels he has the time to actually focus on growing Fondo with his team. And because he has direct insights into the metrics his company needs to hit and a predictable amount of capital he can draw from as needed, he feels he can make more informed and strategic decisions for his business. 

Looking to the future, Phillips is optimistic about the additional growth Fondo can achieve with the help of Capchase.

"Capchase enables us to set ambitious goals and have the funding to achieve them. That security helps me sleep at night and is the single greatest benefit to working with Capchase.”

If you’d like to learn more about Capchase and how we can help you access non-dilutive, revenue-based funding, get in touch with our team. 

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