Pipe Raises $50 Million To Streamline Companies’ Access To Financing

Recurring revenue trading platform Pipe announced this week it has raised $50 million in strategic equity funding.

Participants in this latest funding round include Raptor Group and Siemens Next47, along with Shopify, Slack, Hubspot, Okta, Chamath Palihapitiya, Marc Benioff, Michael Dell’s MSD Capital, Republic, Alexis Ohanian and Joe Lonsdale.

This funding round brings the total raised equity to $66 million, money that will be used to expand Pipe’s footprint around the world and build on investor partnerships.

Pipe bills itself as a two-sided trading platform “that enables entrepreneurs to grow their businesses on their terms … treating recurring revenue streams as an asset, Pipe allows companies to transform their recurring revenue into upfront capital, instantly.”

On one side of those trades, each company gets rated according to its own merits, allowing them to access the best possible bid price according to their risk level. The healthier the company, the higher their value on the Pipe platform. On the other side are institutional investors who buy these recurring revenue-generating assets, which function in the same way as fixed-income products.

“When we were approached by such incredible companies with aligned missions to form partnerships, the conversations quickly evolved,” Pipe Co-Founder and Co-CEO Harry Hurst said in a news release. “We felt it made sense to have the broader ecosystem that powers growth oriented companies join forces to invest together in the future of revenue as a tradable asset class.”

In an interview with PYMNTS last year, Hurst said that subscriptions to software-as-a-service companies “have always been an asset. They’ve just never been treated as one.”

According to Pipe’s analysis, the average Software-as-a-Service (SaaS) subscription length is one year, generating 12 months of all-but-certain value. SaaS companies can sell those assets to financiers on the Pipe platform, which then retain the assets on their own balance sheets, with yield coming from customers’ monthly or quarterly payments.