From a year in stealth mode, fintech startup Gynger recently raised $11.7 million in seed funding and $10 million in debt financing. Credit specialist Upper90 and European VC Vine Ventures led the round, with Quiet Capital, m]x[v Capital, Gradient Ventures and Alphabet’s deep-tech VC business also participating.
According to Gynger, in the past twelve months it has used its analytical tools to finance access, for its borrowers/customers, to Slack, DataDog, Braze, Amplitude, Notion, Salesloft and Google Cloud.
Gynger classes itself as B2B SaaS, and its core offering is analogous to what Klarna provides to consumers: ‘buy now, pay later’, albeit with a focus on turbocharging non-dilutive growth (i.e. cash in the door but without a requirement for the founders to give up equity) rather than straightforward consumption
What does this tell us about the Angel/VC ecosystem right now?
Most obviously it underlines the resistance of founders to raising capital in an environment of historic pressures on valuation. Who, after all, would give up precious equity when it is so clearly to the advantage (in terms of pricing per share) of the investor and not the founder?
It also reflects the need to extend runways and provide breathing space between funding rounds, which are rarely the ticker tape publicity parades of old, but are often time-consuming and ego-bruising encounters.
Of course, there are no free lunches. The slickest, most welcoming dashboards on the web cannot detract from the reality of the underlying service, which is the provision of money now at the cost of more money later, better and more simply known as debt. Whether secured (meaning the charge is fixed to a specific asset, which the lender can seize in the event of a default) or non-recourse, these are con
Where businesses are borrowing to fund their tech stack, but the associated future income streams are uncertain or non-existent, the problem is deferred but exacerbated.
Eventually the piper has to be paid, and in an era of rocketing interest rates that final bill is likely to be eye-watering.