Efficient Capital Labs raises $7 million Pre-Series A led by QED Investors to bridge the funding and cost gap for B2B SaaS businesses focusing on the South Asia-U.S. corridor.
ECL provides B2B SaaS companies a percentage of their ARR as upfront capital which is 100 percent non-dilutive in nature.
Efficient Capital Labs (ECL), a fintech company that provides non-dilutive capital to B2B SaaS companies operating in the South Asia-U.S. corridor, today announced a $7 million Pre-Series A raise led by QED Investors with participation from existing investors including 645 Ventures, The Fund, Lorimer Ventures, Riverside Ventures and Generalist coming in as a new investor alongside QED. This was ECL’s second raise in less than a year.
ECL provides B2B SaaS companies a percentage of their ARR as upfront capital which is 100 percent non-dilutive in nature. ECL funds customers through its balance sheet, which means that customers get access to capital at a much cheaper cost and don’t have to face the uncertainty that comes with depending on third-party investors or marketplace dynamics to receive capital against revenue.
The latest round of funding led by QED Investors brings the total amount of capital raised by ECL to $110.5 million, which includes a $100 million debt facility. This new round follows the equity raise in April last year of $3.5 million, led by 645 Ventures. ECL will use this fresh round of capital to invest in greater automation, expand its team across engineering, product, underwriting, sales and operations and achieve better unit economics.
ECL was co-founded in 2022 by Kaustav Das and Manish Arora. Before founding the business, Das spent more than 20 years in the industry as chief risk officer at multiple organizations, including Kabbage (now a part of American Express), in both commercial and consumer finance sectors. Arora has worked extensively as a senior leader in B2B SaaS, fintech and regulatory technology spaces, most recently as the general manager, South Asia for PayJoy, a San Francisco-headquartered B2B SaaS fintech.
“Our vision is to enable border-agnostic access to capital for businesses in emerging markets, such as India, that can benefit from lower capital costs that are available in markets such as the U.S.,” Das said.
“Our value proposition is unmatched, we offer the most capital- and time-efficient solution for SaaS businesses looking to raise growth capital. We are immensely grateful to our investors for putting their faith in our vision and mission. The latest fundraise allows us to continue innovating for the customers who we serve.”
Since starting its lending operations in June 2022, ECL has provided funding to more than 50 SaaS businesses, and the business is poised to grow to a total of more than 150 customers before the end of 2023.
“Indian SaaS companies are known for innovative and specialist software solutions, and their growth in selling to the U.S. represents a new era of entrepreneurship and global collaboration,” said QED Investors Partner and Head of Asia, Sandeep Patil. “By providing non-dilutive capital to these companies, ECL empowers the founders to build for the long term and drive innovation and growth. Kaustav and Manish are a formidable team. I am thrilled to partner with them and I look forward to what the future holds.”
645 Ventures, who had led the seed round for ECL also participated in this round. Talking of the latest funding round, Aaron Holiday, Co-founder and Managing Partner at 645 Ventures said, “As Efficient Capital continues to grow, we have seen a surge in demand from SaaS companies. We are excited to continue backing the vision of the ECL founders and delighted that QED shares our thesis and are now our partners in this journey.”
About QED Investors
QED Investors is a global leading venture capital firm based in Alexandria, Va. Founded by Nigel Morris and Frank Rotman in 2007, QED Investors is focused on investing in disruptive financial services companies worldwide. QED Investors is dedicated to building great businesses and uses a unique, hands-on approach that leverages its partners’ decades of entrepreneurial and operational experience, helping companies achieve breakthrough growth. Notable investments include AvidXchange, Betterfly, Bitso, Caribou, ClearScore, Creditas, Credit Karma, Current, Flywire, Kavak, Klarna, Konfio, Loft, Mission Lane, Nubank, QuintoAndar, Remitly, SoFi, Wagestream and Wayflyer.
About 645 Ventures
645 Ventures is an early-stage venture capital firm that partners with exceptional founders who are building iconic companies. We invest at the Seed and Series A stages and leverage our Voyager software platform to enable our Success team and Connected Network to help founders scale to the growth stage. Select companies that have reached the growth stage include Iterable, Goldbelly, Resident, Eden Health, FiscalNote, and Squire. 645 Ventures has $200m+ in AUM across 3 funds, and is growing fast with backing from leading institutional investors, including university endowments, funds of funds, and pension funds. The firm has offices in New York and SF, and you can learn more at www.645ventures.com.
About ECL
Founded in 2022, Efficient Capital Labs is a New York headquartered fintech that provides non-dilutive capital to B2B SaaS companies operating in the South Asia-US corridor - i.e., companies that generate a majority of their revenues from the US or North American market while maintaining a significant part of their technology, product development, and operations teams in South Asia. Efficient Capital Labs provides revenue-based financing to its clients and deploys capital out of its own balance sheet. To learn more about Efficient Capital Labs please visit: https://www.ecaplabs.com.
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