Ratio, a new kind of fintech platform that combines payments, predictive pricing, financing, and a frictionless quote to cash process into one platform for SaaS and technology companies, emerged from stealth and “announced raising $11M in venture funding and a $400M credit facility for customer financing.”
Led by a team of industry veterans, Ratio claims it is “rewriting the rulebook for SaaS pricing and financing, driving value for vendors by delivering a new set of tools to accelerate growth in the turbulent market.”
The subscription economy is now “a $1.5 trillion segment of the recurring revenue market, with industries ranging from software to razor blades deploying subscription-based business models — but companies still face challenges with deferred cash flow, steep discounting, and the time needed to recoup customer acquisition costs, even as customers’ desire for payment flexibility is growing more ubiquitous.”
The current cash flow crunch “has only exacerbated this problem.” That’s where Ratio comes in: its platform “allows SaaS companies and other recurring revenue businesses to provide embedded buy now, pay later (BNPL) services that granularly match their customers’ cash flow needs.”
This provides flexibility to the customer, “while boosting sales for vendors and giving them immediate access to the value of the customer contract.”
Simultaneously, Ratio allows SaaS businesses “to leverage their recurring revenue streams to unlock instantaneous new non-dilutive capital — without having to give up additional equity, dilute control of their business, steeply discount their products or spend countless hours in an always-be-fundraising mode.”
Ratio’s platform is built around two powerful core products:
- Ratio Boost, a fully integrated BNPL payment, optimized pricing, and checkout product, embedded via API into the seller’s systems and processes at the point of sale. Customers get ultimate payment flexibility, by matching their cash flow needs, and a frictionless buying experience automatically tailored to their company’s unique needs, while vendors get paid cash upfront for each customer contract, minimizing discounting and dilution. Better yet, by applying machine learning to financial and behavioral data, Ratio Boost can validate and optimize product pricing and payments for churn risk, lifetime value, and willingness to pay.
- Ratio Trade, a non-dilutive upfront capital solution for high-growth SaaS and recurring revenue companies backed by their portfolio of contracts. With Ratio Trade, vendors no longer have to discount their offerings or dilute equity to access working capital — and they can access financing in days, not months, to keep growing their brands.
Together, Ratio’s technologies “offer a compelling solution for both SaaS vendors and SaaS buyers in today’s increasingly cash-constrained environment.”
With 80% of SMB buyers expecting a recession this year, the ability to streamline payments over time and maintain a cash operating buffer “makes software purchases far easier to justify.”
For enterprise buyers, with budgets tightening, BNPL solutions “enable easier purchasing decisions for IT purchases.” And with funding for the SaaS sector now waning, Ratio’s solution “enables vendors to boost sales, maximize revenues, and reduce the need for costly discounting in order to finance their growth.”
Ratio’s founders and management team “have deep roots in the SaaS and technology spaces, with proven experience building large software businesses and early stage companies.”
Together, they “created Ratio to solve the challenges they themselves experienced running major SaaS businesses and startups.”
Founder and CEO, Ashish Srimal, has “held executive positions at SAP and Medallia.”
Additionally, Chief Commercial Officer Carlos Chou “held senior executive and revenue leadership positions at SAP, Hewlett-Packard, Oracle, and notably at Siebel Systems, where he served as President prior to the acquisition by Oracle.”
Ratio’s investors “include Streamlined Ventures, Cervin Ventures, 8-Bit Capital, HoneyStone Ventures, multi-billion dollar asset managers and a range of tech CEOs from both large and small companies.”
Ashish Srimal, Ratio cofounder and CEO., said:
“Payment flexibility, intelligent and iterative pricing, combined with a frictionless quote to cash process is the new strategic frontier for SaaS growth. We use data, machine learning, and finance as tools to unlock this growth lever for our customers. This creates a win-win for both tech buyers and sellers — buyers get more payment flexibility to match their cash flow and procurement constraints, and sellers get more revenue acceleration tools. Our mission is to democratize the way that we buy, sell, and fund technology.”
As noted in the update, Ratio allows technology companies “to leverage their recurring revenues to unlock new financing without diluting equity or surrendering control of their business.”
With access to a $400 million credit facility, Ratio claims it is “rewriting the rulebook for the global subscription economy and recurring revenue businesses.”
Source: Crowdfund Insider