SaaS Capital, a provider of debt-based growth capital for SaaS companies, has closed its second fund with $58 million in limited partner commitments. SaaS Capital’s first fund, which closed in May 2012, had $22.5 million in limited partner commitments and invested in 14 SaaS companies.
“The $58 million, when paired with our bank line, will give us the capacity to fund $75 million to $100 million into approximately 25 new SaaS portfolio companies,” said Todd Gardner, Founder and Managing Director of SaaS Capital. “The larger scale allows us to better serve the West Coast by bringing on a Managing Director in Seattle, and also assist bigger, more established SaaS companies with larger investments, up to $10 million.”
SaaS companies use SaaS Capital as an alternative to a round of equity or traditional senior debt. SaaS Capital’s line of credit facilities – ranging in size, from $2 million to $10 million – allow SaaS companies to draw down funds as needed over two to three years, and repay it over an additional three to five years.
SaaS Capital launched both Fund I and Fund II in partnership with DH Capital (www.dhcapital.com), a New York-based investment bank focused on Software-as-a-Service and data infrastructure companies. Through its partnership with DH Capital, SaaS Capital can also assist SaaS businesses with a variety of M&A and capital raising advisory services.
“DH was an instrumental partner in raising the new fund,” said Mr. Gardner. “Additionally, the firm continues to provide ongoing support by assisting our portfolio companies with acquisition, exit or follow-on private equity transactions as needs arise.”
SaaS companies as small as $2 million in annual revenue and as large as $40 million have used SaaS Capital to fund their growth. And despite being less than three years old, Fund I has already realized a half-dozen successful exits. Companies such as Liquid Planner, which used the debt to grow into an $8 million Series B raise, as well as Clinicient and CoverMyMeds, which skipped a venture round altogether and recently raised private equity from Catalyst Investors and Francisco Partners, respectively, have all been better positioned to realize greater value for their founders and existing equity holders by working with SaaS Capital.
SaaS Capital was founded in 2006 and is headquartered in Cincinnati with additional offices in New York and Seattle (www.saas-capital.com).
© 2015 PEPD • Private Equity’s Leading News Magazine • 3-5-15