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During the latest IPO run this column has become monomaniacal in its coverage of late-stage firms and their impending liquidity events. After years of a , watching a crush of debuts has been exciting as heck.

There is more, however, to the world of tech and money than just big companies trying to defend private valuations with public investors.

In that vein, a few things caught my eye this week that I wanted to bring to you, so today we’re picking at the different fare. Let’s go!

Scaleworks Goes Shopping

has an interesting model. In fact, we covered its most recent fundraise earlier this year when the group put together a fresh $80 million. Scaleworks buys SaaS companies with $1 million to $4 million ARR, grows them, and then exits them. (It also makes venture loans, which are a good way for some SaaS companies to raise against revenue, saving them from selling equity to raise capital).

Anyway, Scaleworks is in the news for buying a new company in a transaction that it described in an email as its first leap into the ecommerce space. The group it snapped up is , a firm that Crunchbase data indicates was Colorado-based and born in 2007. It sells search tools to ecommerce players.

No price was disclosed, but I wanted to tag this deal as one presumably from the new, larger Scaleworks fund. That means we can track how well it does, and begin to get a feel for how the Scaleworks model functions over the next few years.

Sonarworks Raises

We’re working to better cover the global venture market here at Crunchbase News. The good news is that there’s lots of venture activity all around the world. The bad news is that because there is so much activity, it’s nigh-impossible to cover even a fraction of the flow.

So, consider this an attempt to beat back our U.S.-focus: , a Latvia-based company, raised 5 million Euros this week in a Series A transaction that was put together by a host of regional funds. Here’s how Sonarworks described the capital event:

The financing was co-led by (Estonia) and (Lithuania), with participation from (Turkey), (Estonia), ProksCapital and (Latvia). [Links added]

That’s an amazingly cool list of investors for two reasons. One, their names are great. And two, because I had heard of an embarrassingly slim number of them. Sonarworks, for the curious, works in audio tech, specifically in “sound calibration software.”

A Crypto Boomlet

I know that you’ve forgotten about crypto, but the crypto market has kept chugging along while the rest of the world did anything else. The good tidings recently are that — despite the U.S. government — the price of Bitcoin is back up over $7,500 and Ether is over $200. Smaller coins and tokens rose alongside them.

What this means for our purposes is that trading revenues at firms like are likely up. That could mean more rounds for the big dogs, and likely a bit more angel interest for the smaller players. Crypto: Still a thing.

How To Read An S-1

We did a post last year about how to read an S-1. Since then we’ve started a few drafts of how to analyze an S-1.

You haven’t read those because I can’t figure out how to write something that isn’t both 5,000 words and useless. That’s not a joke, I have a monster draft buried somewhere around here next to several shorter, more abortive attempts.

Happily for you, if unhappily for me, an investor has managed to scratch into the sand a lot of reasonable points regarding how to analyze an IPO filing. So, here’s . Enjoy.

Illustration: .

, a San Antonio-based company that deals financially with SaaS businesses, its second fund this week. The new capital pool, dubbed “Fund II,” totals $80 million. That’s $20 million larger than its first $60 million fund, which closed two years ago this month.

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Another day, another fund? Not in this case. What makes Scaleworks interesting is that it’s not merely another generic SaaS-focused venture effort. Instead, Scaleworks makes two types of transactions that you don’t often see from venture capitalists: Purchases and venture loans.

The latter is an effort to lend growing SaaS businesses ($1 million ARR in a B2B market, strong margins, low churn, growth, paid back over 12 to 60 months, per the Scaleworks website) as much as six times their current monthly recurring revenue. It’s simpler to think of the loan as up to half your current ARR that you then pay back from future revenue.

But today’s news has more to do with Scalework’s other business, what it calls “venture equity.” In short, Scaleworks buys SaaS companies with between $4 million and $10 million in ARR and then works to grow and (I presume) exit the companies it picks up. In a from 2016, Scaleworks general partner  summarized the thesis as follows:

“The elevator pitch is ‘to acquire proven software businesses that have significant growth potential, sustainable over time’.”

With its first $60 million fund, Scaleworks detailed this week that it bought eight companies which collectively grew 52 percent to $80 million in revenue in 2018. With its fresh $80 million, the firm is aiming at larger deals than before, according to a Scaleworks spokesperson (the $4 million ARR floor).

Of those eight, two Scaleworks companies exited last year (, and ).

Thinking generally about the Scaleworks model, it likely alleviates some pressure for business-focused SaaS companies to spend on inefficient growth; it’s not hard to find examples of SaaS companies today still plowing cash into sales at alarming . But the Scaleworks model, I’d imagine, allows for slightly less-frantic growth pressures and leaner operating costs (centralization can have perks), a combination that could generate healthier SaaS businesses.

Which could be easier to exit to larger companies looking to buy tech or revenue, both of which are cheaper upfront and long-tail than purchasing future growth.

Normally at this point in a story, I’d note that the global economy feels fragile, SaaS revenue is historically expensive at the moment, and more. But, I keep shouting about the same risks and looking silly when the markets go up again. So, who knows, perhaps the expansion will continue! For Scaleworks and its new fund, that would be more than welcome.

Top Image Credit: .