Lighter Capital enters into agreement to sell up to $100 million of loans to emerging tech startups

Lighter Capital , “the leader in providing growth capital to tech startups,” announced it has entered into an agreement to sell up to $100 million in credit assets to a private investment vehicle managed by HCG Fund Management, LP. Lighter Capital plans to use the proceeds to fund hundreds of early-stage companies in SaaS, tech services, and digital media with its non-dilutive forms of financing including Revenue-Based Financing, Term Loans, and Lines of Credit. Since 2012, Lighter Capital has invested over $200 Million in 350+ startups over 650 rounds of financing.

Lighter Capital “recognized early on” that there was a funding gap between angel and VC and became one of the first to make an alternative form of financing – known as “revenue based financing” (RBF) – widely available to startups. RBF gives startups access to growth capital and flexibly adjusts monthly payments based on the ups and downs of a company’s performance. Rather than take equity in these companies, Lighter Capital takes a percentage of monthly revenues over the life of the loan.

Lighter Capital’s fintech platform pulls in 6,500 data points, uses proprietary algorithms to determine a credit rating and data science to predict a startup’s revenue growth with 97% accuracy, on average. Additionally, Lighter Capital’s “transparent funding process” gives startups access to up to $3 million in debt capital in a fraction of the time it takes to raise traditional forms of financing, reducing an entrepreneurs’ time to raise funds by over 90%.

Last summer Lighter Capital introduced two new financing options: term loans with a forward commitment and lines of credit. The company also formed a key partnership with Silicon Valley Bank, giving entrepreneurs another way to raise non-dilutive capital and obtain financial and banking services. Lighter Capital will sell up to $100 Million of RBF loans and term loans to HCG and will use the proceeds of such sales toward the underwriting of new RBF loans and term loans, as well as other services that the company plans to roll out in 2020.

“While RBF has proven to be enormously popular with startup founders and is still the foundation for what we do, we’ve quickly evolved with multiple debt capital offerings that serve the diverse capital needs of startups. Our agreement with HCG will allow us to continue providing startups a variety of non-dilutive financing options in order to fuel their growing businesses.” – Thor Culverhouse, Lighter Capital’s CEO.

“Lighter Capital fits perfectly within our mission of growing our client wealth through digital finance solutions. Since its earliest days, Lighter Capital has provided tech startups an easy way to quickly and cost effectively fund their future growth. We are convinced that they will be the financing provider of choice for an increasing share of smart startups that are ready to scale.” – Hadi Habal, co-founder and CEO of HCG.