The ‘Nasdaq’ for trading recurring revenue gets backed by Benioff, Palihapitiya, Shopify
Pipe Technologies, the one-year-old platform for companies to trade monthly recurring revenue for upfront annual revenue from yield-seeking buy-side investors, announced a strategic financing round on Tuesday consisting of a who’s who of individuals and companies to fuel the company’s global expansion.
The $50 million strategic equity funding, led by Siemens Next47 and Jim Pallotta’s Raptor Group, includes Shopify (SHOP), Slack (WORK), HubSpot (HUBS), Okta (OKTA), Chamath Palihapitiya, Marc Benioff, Michael Dell’s MSD Capital, Republic, Alexis Ohanian, and Joe Lonsdale.
While many press releases often tout the number raised in a financing round, this one intentionally excluded that figure in the headline. The round also excludes traditional venture capital investors and instead features a handful of publicly-traded companies and individuals.
“We worked really hard to get this amazing group together. This was not a traditional financing. We’ve been very intentional. It’s not about the number. We don’t even need the money. We have five or six years of runway going into this,” Pipe’s co-founder and co-CEO Harry Hurst told Yahoo Finance.
Hurst explained that Pipe’s focus is on “who’s coming to the table” and who is “aligned with the mission of building a healthier ecosystem and helping companies to grow.”
“So for us, this was just about putting together a highly strategic consortium of individuals and publicly-traded companies that had this huge ecosystem of millions of customers that not only are we now one-degree separation from but, more importantly, we’re just super aligned in the missions with all of these companies,” he added.
Pipe, which relocated to Miami from Los Angeles in September, allows companies to trade their monthly recurring revenue (MRR) for annual recurring revenue (ARR) cash flow to finance growth without debt or dilution. The company launched in beta in February 2020 and opened its floodgates that June. Pipe has already garnered more than $1 billion in tradable ARR, with more than 3,000 companies signed up for the platform.
“We’re building the Nasdaq for revenue,” Hurst said, a reference to the stock exchange.
In other words, Pipe built a trading platform for a new asset class — recurring revenue — in which companies can trade their recurring revenue streams for upfront capital from institutional investors in real-time. Institutional investors like banks, hedge funds, pension funds, and insurance companies compete against each other for other deals through the platform. Each company is rated on its own merits.
. . .
Image: Pipe’s co-founder and co-CEO Harry Hurst