Matthew Cowan, General Partner, Next47
In a world with a growing number of alternative financing options, Pipe stands out on its own, which is why we are delighted to count ourselves as one of their lead investors. Pipe has unlocked revenue as an asset class, creating the world’s first trading platform for recurring revenue businesses. Pipe’s platform enables companies to trade their recurring revenue contracts with institutional investors for upfront capital, instantly.
As the world shifts towards a subscription-based model, companies are looking for more ways to access capital efficiently. What started with SaaS, we’re now seeing applied across everything from cars, to industrial equipment, and even to how we purchase consumer products. Pipe gives these companies a platform for monetizing that recurring revenue and, as such, is revolutionizing how companies access capital in order to build and grow their business.
Prior to Pipe, when raising capital, founders only had two primary sources of financing, neither of which is always ideal: selling equity or taking on restrictive debt. Without Pipe, companies either have to wait for future monthly cash flows to invest into growth or offer steep discounts to receive the full annual value of that contract upfront. Pipe is solving for this inefficiency by giving founders the ability to sell their recurring revenue contracts as a tradable asset.
Pipe is giving companies with recurring revenue streams the ability to access capital more flexibly, dynamically and at a lower cost than ever before. Instead of being forced to offer deep discounts for year-long contracts that are paid upfront, companies now have the ability to monetize monthly and quarterly revenue streams for upfront capital. And they can do so as quickly and as frequently as their sales/marketing team can mint them.
As passionate, active investors in companies with recurring revenues, at Next47, we think Pipe will help accelerate growth and opportunities for our partners and other startups. For instance, large industrial companies like Siemens are merging software with industrial equipment and are moving towards a subscription-based model. The Pipe model for trading-based financing will help accelerate this transition.
Pipe is unlocking the world’s largest untapped asset class, revenue, and we are excited to be part of the journey. The relationship with Pipe will also be an enormous advantage to our existing and future portfolio, which will have direct access to this new alternative financing platform.
Simply, I see Pipe as a force multiplier for any business. But more than that, it’s a revolution.