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$400K in interest expense finances a $10 million increase in net equity value

.1x
RETURN ON CAPITAL
$.0 M
COST OF EQUIVALENT EQUITY FUNDING
$.0 million
COMMITTED CAPITAL AVAILABILITY OVER 2.5 YEARS
$ K
TOTAL COST OF CAPITAL OVER 2.5 YEARS
$.6 million
NET EQUITY VALUE CREATED

 

“SaaS Capital clearly understands the SaaS business model and was a valuable source of funding and expertise for our business during a strategic period in the lifecycle of our company.”

| CEO & Founder

Background and Situation:

The company, based in North Carolina, provided mobile and web-based administrative automation for home healthcare and hospice agencies. After a financial restructuring, the company embarked on a period of rapid growth and expansion and turned to SaaS Capital to accelerate its market expansion, customer success teams, and product development.

SaaS Capital Solution:

SaaS Capital provided a line-of-credit with $2.0 million in total availability that the company used for two and a half years. When the company was eventually acquired by a larger competitor, net equity value had increased by $9.6 million and the company had paid just $400K in interest expenses over the life of the loan.

Benefits to the Company:

During the time that the company was a part of the SaaS Capital portfolio, it doubled its number of actively installed customers, expanded its professional services organization, and launched a re-engineered version of its software.

Annual revenue increased by 130% during the term of the loan and year-over-year growth remained a healthy 40%. Had the company funded its growth with equity, it would have cost approximately $3.8 million at exit.

The company was able to increase its borrowing to fund expanded operations as the availability of the SaaS Capital credit line increased with its strong revenue growth. The charts below depict the company's revenue growth as it relates to funding availability and amount borrowed.

caw charts144

INDUSTRY: HEALTHCARE TECHNOLOGY   ›   FOUNDED: 2002  ›   FUNDING DURATION: 30 MONTHS  ›   REVENUE GROWTH: 130%  ›   EXIT EVENT: ACQUIRED

“Working with SaaS Capital, we were able to very quickly put together a credit facility that leveraged our existing market success and strong customer relationships to optimize our business further. The fact that the facility grew along with the business ensured the long-term flexibility that we needed.”

 

﹡A note about calculating the cost of equivalent equity:
The cost equivalent equity is calculated as (Amount Borrowed/Pre Money Value)*(Exit Value).

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