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Where Credit’s Due Ep. 10: Getting capital without dilution or debt through recurring revenue financing, with Pipe and Anthemis
It’s tough to raise capital these days – VC wallets are tightening as many investors are opting for a wait-and-see approach. This makes it harder to land a deal and get more cash through the door.
For entrepreneurs in need of financing for their companies, equity capital is still the most popular approach, but is harder to come by in an inflationary environment. However, dilution by selling ownership shares in your company for a part of future cash flows is not the only way to get capital.
Today, we’re talking about another way of accessing capital: recurring revenue financing. If there’s cash flow coming in, this recurring revenue is made into a tradable asset that can be sold to investors.
It’s a dilution-free and debt-free form of financing, which we’re exploring in more detail with Michal Cieplinski, Chief Business Officer at Pipe, and Farhan Lalji, Investor at Anthemis.
The latest briefing
Lending Briefing: Debit cards are taking over
Debit cards are becoming increasingly popular. This year, they emerged as the preferred payment method for the majority of US consumers, dethroning credit cards.
According to a survey by 451 Research, 56% of consumers preferred to use debit cards as their primary payment card, whereas 40% still opted for credit cards.
This represents a 180-degree flip compared to last year, when 40% of consumers said they preferred debit cards while 55% preferred credit cards.
Younger generations are behind this switch – even though they’re also getting credit cards, Millennials and Gen Zers prefer to pay with debit.
Read more (exclusive to Outlier members)
Just look at the charts
1. Innovation opportunities in SMB financing
2. A success model for fintech
Regulators slap banks with $2 billion in penalties over WhatsApp probe
US regulators reached settlements with a dozen banks in a sprawling probe into how global financial firms failed to monitor employees’ communications on unauthorized messaging apps, bringing total penalties in the matter to more than $2 billion. (Bloomberg)
FTX wins $1.4 billion auction for Voyager Digital assets
FTX has won the auction for the assets of bankrupt crypto lender Voyager Digital with a bid worth just over 1.42 billion. The winning bid includes about $1.31 billion for the fair market value of Voyager’s digital assets and an additional consideration estimated as providing approximately $111 million of incremental value. (Finextra)
JPMorgan doubles down on UK retail bank Chase
JPMorgan is planning to double the size of its workforce at fledgling British retail bank Chase to at least 2,000 within two years, despite losses and some investor skepticism. (Reuters)
Robinhood’s Web3 wallet beta is now live
Robinhood is releasing the beta version of its Web3 wallet, allowing users to swap assets on its non-custodial wallet. The wallet will allow users to trade over 20 cryptocurrencies supported by a decentralized exchange aggregator 0x, without fees. It will also allow users to connect to dapps and earn a yield on assets. (CoinDesk)
PNC Bank taps Blend for digital mortgage applications
PNC Bank announced a strategic partnership with cloud banking software provider Blend, to digitally optimize the company’s end-to-end online mortgage application process. Customers can import bank or payroll information directly into their application by providing their necessary credentials (Finextra)
JPMorgan launches DoorDash credit card, strengthening dining push
JPMorgan is launching a credit card with DoorDash, which will operate on the Mastercard network. JPMorgan and DoorDash have collaborated on credit card perks since January 2020, while Mastercard and DoorDash began offering benefits together last year. (Bloomberg)
Shopify invests in offline retail with POS Go
Shopify has unveiled POS Go, a point-of-sale hardware solution that lets merchants transact sales “from counter to curb.” POS Go comes with a built-in barcode scanner that allows merchants to start checkouts anywhere in their stores. They can also accept tap, swipe, and chip card payments, and view sales, analytics, and inventory on POS Go from every channel. (PYMNTS)
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