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Enter , which this morning announced it raised $6 million in seed funding led by .

, and founded Pipe in September 2019. Their goal is to offer SaaS companies a way to grow without diluting their current cap table.

Pipe claims it does this by offering an instant cash advance against the full annual value of a company’s software subscriptions. So basically, according to co-CEO Hurst, it turns monthly recurring revenue into annual recurring revenue.

“We built this for SaaS companies because they, in particular, benefit from immediate payment,” he wrote via email. “With Pipe, they don’t need to discount revenues to entice customers to prepay.”

, , ����dzܲԻ�����, General Counsel , , and also participated in the round. (There’s been a recent trend of startup founders investing in other startups as of late, such as in the case of Front, which we wrote about here.)

The premise behind the Los Angeles-based company was appealing to , co-founder and general partner at Craft Ventures. Historically, he said, the main financing option for SaaS companies has been dilutive equity rounds.

“Pipe is the tool every SaaS founder has been waiting for,” he said in a written statement. “It allows SaaS companies to grow without dilution by financing their SaaS receivables.”

How it works

Pipe says it is addressing a (as of 2018), which is growing by double-digit percentages year over year.

The Pipe’s platform assesses a customer’s key metrics by integrating with its accounting, billing and subscription management systems. It then makes “an instant decision on whether the company qualifies for a PipeLine of finance.” Facilities range from $10,000 per month to several million dollars per month for later-stage companies.

I was curious as to how Pipe could provide such facilities with just $6 million in seed funding. Hurst told me the company is also backed by debt providers (such as ) to be able to provide the facilities to its customers. But he emphasizes that Pipe is “not providing debt,” and is “not a loan.”

CEO said his SaaS company has risked losing deals in the past by requiring annual upfront payments when customers wanted to pay monthly.

“Pipe solves this for us and allows us to invest more heavily into our growth,” he said. “It may easily save us a fundraise.’’

Pipe has only officially been in the market for a few weeks but Hurst said it’s been “growing 100 percent week-over-week during beta.” The company is officially launching out of beta today.

The six-person company plans to use its first round of funding to expand its sales and engineering teams out of its L.A. headquarters and in San Francisco and Phoenix. But looking ahead, the company considers what it’s doing “as a global opportunity.”

Illustration:

It is nearly three times the size of , which topped out at a little over $3 million in 2017.

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According to the filing, Weekend Fund received its first hard capital commitment in early June, and has raised Fund II from 98 investors.

Weekend Fund is an early-stage investment firm founded and operated by , founder of , a popular community-driven aggregator of recently-launched startups and new products from large companies. Hoover started Weekend Fund in 2017, shortly after for around $20 million.

In a announcing the launch of his new fund, Hoover wrote that Weekend Fund echoes his work on Product Hunt, which he “started as a side project” and worked on during nights and weekends. Writing at the time, Hoover said that “Product Hunt remains my #1 focus, and like the startups I plan to invest in, this is my nights and weekend hustle.”

In the post announcing Fund I, Hoover cited a number of companies and products which started as side projects. This includes the likes of , , and , among many others. “Right now, the next Facebook is being built on nights and weekends and its these curious, creative founders that I’d like to support,” he wrote.

Weekend Fund is , but largely sector-agnostic. The firm invested in social media companies like and , elder care communication company , personal finance companies like and , esports streetwear and lifestyle brand , and voice interface design platform Voiceflow, among the many other ventures listed on .

Hoover in early 2019 that Fund I did not take a management fee from its limited partners, but that Fund II would.

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