Last year, 8-Bit Capital invested in Ratio, a new kind of fintech platform that combines payments, predictive pricing, financing, and a frictionless quote to cash process into one platform for SaaS and technology companies.
Today Ratio emerging from stealth and announced $411 million in equity and debt funding.
Their new funding includes $11 million in venture dollars raised in late 2021 and a $400 million credit facility for customer financing. Investors in the round include Streamlined Ventures, Cervin Ventures, 8-Bit Capital, HoneyStone Ventures and a group of individual investors.
When deploying subscription-based business models, SaaS companies often face challenges, like deferred cash flows, discounts and time to recoup customer acquisition costs. For example, Srimal explained that if a company signs a contract for $1.2 million, but the customer wants payments to be monthly or adjusted to how best they can pay, some companies can’t do that, so they offer a 20% or 30% discount.
That’s where the credit facility comes in: Ratio makes the discounts unnecessary by giving the SaaS company the $1.2 million upfront so they can offer more flexible payment options for their customers to match their cash flow needs.