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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.

鈥淲e built this for SaaS companies because they, in particular, benefit from immediate payment,鈥� he wrote via email. 鈥淲ith Pipe, they don’t need to discount revenues to entice customers to prepay.鈥�

, , 听贵辞耻苍诲别谤听, 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.

鈥淧ipe is the tool every SaaS founder has been waiting for,鈥� he said in a written statement. 鈥淚t allows SaaS companies to grow without dilution by financing their SaaS receivables.鈥�

How it works

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

The Pipe鈥檚 platform assesses a customer’s key metrics by integrating with its accounting, billing and subscription management systems. It then makes 鈥渁n instant decision on whether the company qualifies for a PipeLine of finance.鈥� 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聽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.

鈥淧ipe solves this for us and allows us to invest more heavily into our growth,鈥� he said. 鈥淚t may easily save us a fundraise.鈥欌��

Pipe has only officially been in the market for a few weeks but Hurst said it鈥檚 been 鈥済rowing 100 percent week-over-week during beta.鈥� 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鈥檚 doing 鈥渁s a global opportunity.鈥�

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Her software startup, , is currently part of the winter batch at and has just raised $600,000 in venture capital from a crop of investors.

Notable investors in TrueNorth include Y Combinator, CEO Jack Altman, CEO Parker Conrad and CSO Peter Fishman. Liquid2, Joe Montana鈥檚 fund, and others also invested.

While we usually don鈥檛 cover rounds of this size, an uptick in funding for the logistics and freight space made us more keen to look at what it takes for a new startup to enter the market, especially when billion-dollar companies like take much of the spotlight.

TrueNorth

Stedge was adopted as a child by a family of truckers, and that upbringing led her to have personal insight into the weaknesses of the industry.

Her grandparents were truckers in the 1980s–and 鈥�40 years later, little has changed,鈥� from a technology perspective she told SA国际传媒 News. She pointed to her cousin, Tom, who is a trucker.

鈥淗e still operates primarily on phone calls and mail,鈥� she said. 鈥淢ost financial tools in the industry are clunky at best, predatory at worst.鈥�

TrueNorth, founded by Stedge and , offers software that puts 鈥渋ndependent truckers under one roof.鈥� While the company doesn鈥檛 lease trucks, it helps truckers have a platform to manage insurance, fuel and maintenance. Think of it as an operating system, but for trucks. It also helps truckers with route optimization, dispatch and load coordination, and automated tracking.

The entrepreneur considers average trucking agencies like as her competitors.

Currently, truckers have to choose between working in a large fleet like JB Hunt with little independence, or give up revenue by being a solo operation. TrueNorth claims it offers large-fleet resources, like those listed above, with a lower take rate than traditional companies because its back-office is powered by software.

鈥淲e cut down the busywork to 10 percent of what it traditionally is, so that our employees can focus on the relationship side of trucking,鈥� she wrote in a blog post.

The TrueNorth founders previously spent time at where they worked on autonomous trucking technology. So this isn鈥檛 their first road trip.

鈥淎utonomy is really far away, at least a decade or two,鈥� she said. 鈥淎nd it鈥檚 not going to displace truckers any time soon.鈥�

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