New York-based Skalar announced the launch of a financing model targeting the gap between technology startups’ spending on customer acquisition and the time those companies need to collect sufficient revenue from those customers. Skalar does not take an equity stake, nor does it impose a fixed deadline for repaying the financing; instead, it links repayment to revenue generated by the customers whose acquisition costs it financed.
The company disclosed a seed funding round whose value was not announced, led by São Paulo-based investment firm Monashees, along with a debt-financing partnership with General Catalyst’s Customer Value Fund. Since its founding in January, Skalar has committed to financing more than $125 million in sales and marketing expenses for seven technology companies over the following 12 months.
How does the model work?
Skalar finances spending allocated to sales and marketing initiatives, then receives repayment from the revenue generated by customers acquired through that spending. The company says its current agreements generally target collecting approximately 1.1 times the amount advanced.
If a company spends $10 to acquire a customer it expects to pay $1 per month for 30 months, Skalar provides the $10 and receives the first $11 generated by that customer. After that threshold is reached, the company keeps the remaining revenue. If the customer cancels the service after eight months, however, Skalar receives only $8 and writes off the remaining balance, according to founder and CEO Sebastián Cárdenas.
Repayment could therefore take one month if the company recovers the acquisition cost quickly, or 12 months if it needs that amount of time. Nevertheless, the obligation remains contractual, and its terms may change when the company fails to achieve the expected revenue levels.
What distinguishes it from conventional financing?
Skalar says its model differs from venture debt, which provides non-dilutive financing but may impose higher interest and risks as well as a repayment schedule. It also differs from revenue-based financing, which is typically based on signed contracts or existing revenue. Skalar finances potential revenue before it is realized and assumes part of the risk that the revenue will not be generated in full.
To manage this risk, the company analyzes transaction data to determine customer acquisition costs, retention periods, and the revenue customers generate over time. Founder and COO Daniel Castrillón said the company continuously reassesses companies as new information arrives, making its selection of target customers highly selective.
What are the risks for startups?
The absence of a fixed repayment schedule does not mean the financing is free of restrictions. Skalar sets minimum revenue targets and can request faster repayment if results fall below those targets, or stop providing additional capital under certain circumstances. The terms also depend on estimates concerning revenue, profit margins, currency fluctuations, and the ability to attribute specific sales to a particular marketing investment.
If customer acquisition costs rise or these estimates prove inaccurate, the startup may receive less benefit than it expected. Skalar says its agreements do not give it the right to seize the company’s assets in the event of default, nor do they require borrowers to maintain specified financial metrics or cash balances.
Why does this matter?
The practical change is to transfer part of the risk of financing growth from the startup to the financier, but this does not eliminate contractual and operational risks. The model may suit companies with stable data on customer acquisition costs and revenue, while companies with volatile results need to assess the possibility of accelerated repayment or interrupted funding before relying on it. The pricing details and terms of the agreements, in addition to the range of companies Skalar will accept for financing, remain undisclosed in full in the available material.