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Melissa Widner, CEO of Lighter Capital, on revenue-based financing

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There are a lot of choices for elevating progress capital for established startups. With all the eye paid to enterprise capital, we generally neglect that the overwhelming majority of corporations are usually not funded that method. Income-based financing has been round for greater than a decade and it’s a good different for sure forms of corporations.

Melissa Widner, CEO of Lighter Capital

My subsequent visitor on the Fintech One-on-One Podcast is Melissa Widner, the CEO of Lighter Capital, a pioneer within the revenue-based financing area. We find out about how this area works, what forms of corporations it really works greatest for and the way Lighter Capital has turn out to be one of many market leaders.

On this podcast you’ll study:

  • How she first bought concerned with Lighter Capital.
  • What attracted her to the CEO function.
  • What it’s like working a fintech firm from Australia.
  • The totally different international locations the place they’re set as much as lend.
  • How revenue-based financing works (that was pioneered by Lighter).
  • The forms of corporations which can be of their candy spot.
  • The scale and phrases of their financing.
  • How their underwriting works.
  • Why most revenue-based financing lenders are usually not actually doing revenue-based finance.
  • The affect of the enterprise capital downturn on Lighter Capital.
  • How the collapse of Silicon Valley Financial institution impacted demand for capital.
  • Their historic loss charge.
  • How mortgage demand has been general in 2023.
  • What it was like renewing their credit score facility in the summertime.
  • Melissa’s imaginative and prescient for the way forward for Lighter Capital.

Learn a transcript of our dialog beneath.

Peter Renton  00:01

Welcome to the Fintech One-on-One podcast. That is Peter Renton, Chairman and Co-founder of Fintech Nexus. I’ve been doing this present since 2013, which makes this the longest working one on one interview present in all of fintech. Thanks for becoming a member of me on this journey. In the event you appreciated this podcast, you must try our sister reveals The Fintech Blueprint with Lex Sokolin and Fintech Espresso Break with Isabelle Castro, or hearken to every part we produce, by subscribing to the Fintech Nexus podcast channel.

Peter Renton  00:39

Earlier than we get began, I need to remind you that Fintech Nexus is now a digital media firm. We now have bought our occasions enterprise and are 100% targeted on being the main digital media firm for fintech. What does this imply for you? Now you can interact with one of many largest fintech communities, over 200,000 folks by a wide range of digital merchandise, webinars, in-depth white papers, podcasts, e mail blasts, promoting, and way more. We will create a customized program designed only for you. If you wish to attain a senior fintech viewers, then please contact gross at present.

Peter Renton  01:21

 Right now on the present, I’m delighted to welcome Melissa Widner. She is the CEO of Lighter Capital. So I needed to get Melissa on the present as a result of Lighter have been round for a very long time, they principally invented income based mostly financing, and I’ve by no means had them on the present, so I needed to get Melissa on. We clearly speak in regards to the firm and their historical past, we speak slightly bit about how Melissa grew to become concerned. We clearly speak in regards to the forms of corporations they work with, the kind of financing they do. We speak in regards to the affect of the pullback in enterprise capital and much more importantly, the affect of Silicon Valley Financial institution and the way that modified their enterprise. We speak about loss charges, credit score services, and way more. It was a captivating dialogue. Hope you benefit from the present.

Peter Renton  02:15

Welcome to the podcast, Melissa.

Melissa Widner  02:17

Thanks, Peter. It’s nice to be right here.

Peter Renton  02:19

Nice to see you. Why don’t we get began by giving the listeners slightly little bit of background about your self. Inform us among the highlights of your profession earlier than Lighter Capital?

Melissa Widner  02:30

Okay, effectively, I might think about myself in the beginning an entrepreneur. I ran a, and began a few corporations that each had good exits. After which I grew to become a enterprise capitalist and I used to be working within the US in a enterprise, in a enterprise capital agency. After which in 2009, I moved to Australia with an Australian husband, and ended up serving to launch and was the managing companion for NAB Ventures Nationwide Australia Financial institution’s enterprise fund. We did all fintech investments, many of the ones, many of the investments that I labored on straight have been in US corporations. And in 2018, we invested together with Silicon Valley Financial institution in Lighter, and I went on their board, and in 2020, I grew to become Lighter Capital CEO.

Peter Renton  03:14

Okay, and so that you you’re really in Sydney proper now, I do know that we have been…

Melissa Widner  03:19

I’m in Sydney proper now, which is uncommon. I’ve been within the US largely within the final six months, however I’m in Sydney.

Peter Renton  03:24

You occur to be within the suburb subsequent to the place I used to reside. Mosman, for these individuals who know Sydney, it’s a beautiful, pretty a part of the town. So inform us slightly bit about the way you form of first bought concerned with Lighter and what what led to you taking up the CEO?

Melissa Widner  03:43

So I we first bought concerned in Lighter when NAB, Nationwide Australia Financial institution, made a enterprise funding into the corporate in 2018. Lighter Capital began in 2009. And the enterprise mannequin actually resonated with me, as a result of I used to be an entrepreneur, additionally an angel investor, and a enterprise capitalist. And there’s such a necessity for this different type of financing. And I, you recognize, I skilled that and noticed that up shut, as we all know enterprise capitalists fund a very small proportion of companies. The determine that’s thrown out probably the most typically is 1%, by way of 1% of know-how companies, but it surely’s what will get all of the press. So for those who’re beginning an organization within the tech area, numerous instances folks assume that their solely path to funding is enterprise, however in actuality enterprise funds such a small proportion of corporations. So the enterprise mannequin of funding these, these corporations with income that want progress capital that perhaps aren’t prepared but for enterprise or won’t ever need to do enterprise, it actually resonated with me. So Nationwide Australia Financial institution and Silicon Valley Financial institution invested in 2018. I, you recognize, appreciated the corporate much more after investing and getting extra concerned on the board aspect than I did pre-investment which generally isn’t at all times the case while you’re in enterprise and also you become involved within the firm. I’d by no means been concerned in an organization whose prospects love them this a lot. And it’s really straightforward to be beloved while you’re offering financing. And it’s really easy to acquire in comparison with going, you recognize, down a typical capital elevating path that may take months or years. I grew to become the CEO in 2020. We had to herald a brand new CEO, we had a CEO who was there for a fairly quick time who got here in in 2019. Actually good man, didn’t have a lending background, although. And we would have liked to switch the CEO. And in 2020, I simply love the corporate and utilized for the function and moved from board member to CEO, so I’ve been there for slightly over three years in that capability.

Peter Renton  05:44

So what’s it like working an American fintech firm from Australia?

Melissa Widner  05:50

Yeah, effectively, it’s attention-grabbing, as a result of if it hadn’t been like the center of COVID, I might by no means would have thought this was attainable. And pre COVID, Seattle was very a lot or Lighter Capital was very a lot a pre COVID firm, by way of the workforce was multi functional workplace, they’d rent any person from New York, to run New York and require that they moved to Seattle to do it. So, you recognize, there was the thought that you simply all people needed to come into an workplace and work collectively every single day for the corporate to be efficient. And we found out after COVID hit, that’s not the case. That stated, I spend near half my time within the US. However you recognize, not essentially in Seattle, we have now funding administrators throughout. So sometimes, after I’m within the US, I’m not even in Seattle, and at this level Lighter Capital has workforce members in 9 totally different international locations.

Peter Renton  06:37

Wow. Wow. And do you? I imply, I believe I used to be studying someplace you even have operations in Australia now. Are you lending to Australian companies?

Melissa Widner  06:44

Yeah, we launched in 2021. So it’s been virtually three years that we’ve been funding corporations in Australia.

Peter Renton  06:52

Okay. And so is it, Australia, the US? Is there another? Canada as effectively?

Melissa Widner  06:57

And Canada.

Peter Renton  06:58

Yep. Okay.

Melissa Widner  06:59

In Canada, after which we additionally will have a look at corporations from New Zealand, numerous the businesses, so long as they’ve operations in one of many international locations the place we’re set as much as lend, which is Australia, Canada and the US, then we will fund them. So numerous the businesses that we fund, their headquarters may be based mostly in a kind of areas, however their operations are someplace else.

Peter Renton  07:20

Nicely, perhaps you may clarify the product and the way how the financing works, simply so we will all form of be clear about what Lighter Capital does precisely.

Melissa Widner  07:29

Yeah. So we do income based mostly financing, Lighter Capital is the pioneer on this area. Since 2009, we’ve completed over 1000 rounds of financing, supported over 500 corporations. Most corporations take a number of rounds from us, however the best way it really works, it’s a quite simple software course of. I’ll begin with, you recognize, the the minimal necessities for an organization to obtain our funding is that they’ve a minimum of $200,000 in annual recurring income. And we wish to see that from a wide range of totally different prospects. So there’s not buyer focus. It’s sometimes recurring income, it doesn’t, which doesn’t essentially imply it’s contracted income, but it surely’s very predictable and coming from, you recognize, the identical prospects who’re shopping for the product time and again. The precise software course of is fairly easy. It takes about 10 minutes to fill out our software. Nicely, our pre-qualification software takes 45 seconds, see for those who may be a match, and that’s on Lighter However our software takes 10 to fifteen minutes, you recognize, and we connect with the checking account, the accounting platform, and the billing platform for purchasers utilizing one, and we we principally make our credit score decisioning based mostly on the information. So you recognize, in comparison with, I used to be in enterprise, I pitched to enterprise. That may take months, it’s form of a black field, you don’t know for those who’re gonna get funded. That is quite simple, you will get a solution, normally inside a few days. And funding inside a few weeks.

Peter Renton  09:00

So then what sorts of corporations, the best way you describe it there that’s fairly broad, and there’s plenty of corporations which have $200,000 or extra in recurring income. What forms of corporations, what forms of industries are you largely targeted on?

Melissa Widner  09:13

We’re not trade particular, most however not all of our corporations are B2B SaaS corporations.

Peter Renton  09:19

Okay, what sorts of corporations are usually not an excellent match? I imply, do you…like they may have the recurring income however for no matter motive, they don’t move your your underwriting take a look at is that this type of a candy spot for who’s one of the best match?

Melissa Widner  09:31

Um, the candy spot are sometimes know-how corporations, like I stated, B2B SaaS,. By way of who wouldn’t be a match, um, it’s extra if an organization doesn’t have runway, we’ll get corporations coming to us after they have two weeks or a month of money left and that’s sometimes not a match. We need to see longer runway, we need to see you recognize, even with our capital, we need to see longer runway, corporations which have one buyer, you recognize, one or two prospects aren’t a match, as a result of we’re counting on income to be paid again. So the best way that our product works, we have now two merchandise, we have now a normal time period mortgage. And we even have a income based mostly financing product. And our income based mostly financing product, it really works the place an organization pays us a proportion of their money collected income till the mortgage is paid off. So that they don’t pay, they’ve a hard and fast quantity that they’re going to pay us again. However the charge at which they pay us again depends on how shortly they develop. So in the event that they develop quicker, they don’t pay us again extra of it, we receives a commission again quicker, which is nice for us, as a result of then we have now the next IRR, and that finally ends up being extra worthwhile. And in the event that they develop slower, or they exit of enterprise, we perhaps don’t even recuperate the cash that we put out the door. However so we search for corporations which have a wide range of prospects and low churn. However that stated, you recognize, among the corporations we discover have actually excessive churn, however they’re good at changing it.

Peter Renton  10:59

Okay, what in regards to the the standard financing phrases? Like what’s the dimensions of the funding raised, what’s the typical form of payback time interval, and the rate of interest?

Melissa Widner  11:05

We are going to fund anyplace from $50,000, all the best way as much as $4 million. And by way of sizing, we’ll sometimes go as much as, for smaller corporations, and we’d name a smaller firm, an organization with underneath $3 million in annual recurring income, we may fund a 3rd of their income. So consider an organization doing say one million {dollars}, we may discover $350,000 – 400,000. And as they develop, they’ll take extra. So if their income grows to $2 million, you recognize, they’ll they’ll qualify for as much as $600,000 or $700,000. And after they’re over $3 million in income, we will fund as much as half of their recurring income. So firm doing $4 million may entry $2 million in capital. By way of the phrases, we will do quick time period, which is usually one yr, as much as long term, which may be 3/4+ years. Firms, relying on their money wants, if it’s only a bridging want, they may be in search of quick time period. And the pricing is predicated on the chance of the corporate. So if an organization type of sits in a median threat state of affairs, and so they’re in search of funding for, say, a yr, that might sometimes be round a 1.1. So I provide you with $1. Peter, you’re going to pay me again $1.10. If it’s over a yr, if it’s over three years, you recognize, it may be price $1.30 to $1.40.

Peter Renton  12:29

On the subject of your underwriting then, I presume you may have, you’re taking a look at all the information that you simply talked in regards to the accounting knowledge, the checking account knowledge, that type of factor. How broad is your underwriting field? And the way strict are, like I’m simply form of making an attempt to get a way of that means of underwriting. How do you go about that?

Melissa Widner  12:48

Nicely, for corporations which can be typical B2B, SaaS, it’s fairly easy. We now have a, we have now know-how that we’ve constructed, the algorithm has been perfected over the past decade plus, the place we’re taking in all the information. A few of it’s from the applying, however most of it’s from the banking information and the accounting information and the billing information. And that produces a threat ranking rating. And, and that’s fairly easy. Now, there’s numerous corporations that don’t neatly match into the field. After which in that state of affairs, our underwriters may, with our funding administrators, who’re our individuals who work straight with the businesses, may dig in slightly bit extra to say this, you recognize, this doesn’t match neatly into our credit score field. However you recognize, can we get? Can we perceive the enterprise slightly bit extra, so we will perhaps determine if it’s one thing we may fund?

Peter Renton  13:39

So then, I believe you stated like, Lighter Capital actually was the primary form of income based mostly financing, fintech lender, and we’ve had the founder communicate at our occasions through the years, however as of late, it looks like there’s fairly just a few income based mostly financing corporations on the market, do folks perceive the idea now? Do you must clarify it each time? I imply, the time period mortgage folks get that, do your prospects, and your buyers for that matter, does everybody get it now?

Melissa Widner  14:08

Nicely, numerous corporations name themselves income based mostly financing, that aren’t essentially income based mostly financing, the place if a fee is fastened, which is many of the corporations in our area that decision themselves income based mostly financing, they’ve a hard and fast fee. And that’s not what we’d name income based mostly financing. Income based mostly financing, the fee is predicated on the income, the money collected income, and why that’s actually useful to an organization is that in case your money is lumpy, your money collections take a dip. For some motive. You’ve bought that draw back safety, you don’t have an onerous, you recognize, mortgage fee to make in a month the place you’re not accumulating numerous money. And we noticed that actually come into play in COVID. The place, you recognize, we had some corporations whose income actually in a single day, you recognize, declined 70/80, even 90%. We had an organization within the meals supply enterprise for company. So they’d, you recognize, present lunch, you recognize, consider Google. Google has their very own cafeteria, consider corporations that don’t have their very own cafeteria and so they present lunch. So that you think about what occurred to that firm throughout COVID, their revenues declined 90%. Nicely the quantity they have been paying us declined 90%. So that they have been capable of get by that point. We had one other firm that was a ticketing firm, similar factor, they’re, they’re an important firm, they have been rising like a rocket ship and COVID hit. Their revenues are a proportion of ticket gross sales for occasions, their prospects are occasion venues, their revenues declined loads throughout COVID. They’re again on that rocket ship once more. However they didn’t, you recognize, they weren’t burdened by this large, you recognize, mortgage fee, as a result of it was depending on their money collected income.

Peter Renton  15:57

So then, you recognize, it’s no secret that enterprise capital has been tight, way more tight than it has been within the 2020-2021 timeframe. And I however I’m interested by the truth that as a result of enterprise capital cash has been so tight, has that been an excellent factor for you guys? Or is that, how has that affect you if in any respect?

Melissa Widner  16:19

We’re seeing much more within the final yr than we’ve ever seen within the, you recognize, 13/14 yr historical past of Lighter Capital, of enterprise backed corporations coming to us. Sometimes numerous instances our corporations will go on and get enterprise backing. In truth, we spend numerous time serving to our corporations try this. A number of our direct buyers are enterprise capitalists, numerous our networks are enterprise capitalists, so we really spend numerous time with our corporations who need to go down that path, serving to them with their pitch decks, after which serving to them with heat introductions to buyers. So I don’t need to I don’t need to give the impression that that is an both or, as a result of it’s not the case. However what we’re seeing greater than we have now previously, sometimes, if an organization was on that enterprise path, you recognize, they’re type of completed with income based mostly financing, they’re now occurring that path the place okay, it’s, we’re going to extend our gross sales and lift the subsequent spherical at the next valuation, improve gross sales, increase the subsequent spherical at the next valuation, and so they’re on a really totally different path. However what we’ve seen within the final yr is corporations that had raised enterprise financing, nonetheless are rising , however as a result of they perhaps raised it in 2021, when valuations have been a lot greater than they’re at present, they’re coming again. They usually’re coming to us and doing a income based mostly financing spherical as a result of they don’t need to, they don’t need to do a priced spherical on this setting. In order that’s the that’s the true distinction is seeing extra enterprise backed corporations taking a look at this different.

Peter Renton  17:40

So I need to speak about Silicon Valley Financial institution. And it was form of humorous, I keep in mind we had lunch in San Francisco on the Thursday when this complete factor was happening and with our good pals, Rob Frohwein and Kathryn Petralia.

Melissa Widner  17:53

And you recognize the place I used to be going proper after that assembly, Peter, I used to be working late from our lunch to go to a gathering at Silicon Valley Financial institution at their San Francisco headquarters.

Peter Renton  18:02

Proper. Proper. So that might have been an attention-grabbing assembly I’m certain. So then, you recognize, clearly they have been an enormous supplier of capital to the know-how area. And I do know that Silicon Valley Financial institution nonetheless does exist underneath its new house owners. However I’m interested by like, I’m certain for you. I believe you stated you had your financial institution accounts at Silicon Valley Financial institution, effectively one in all them.

Peter Renton  18:25

So I’m certain it was a significant disaster for Lighter Capital within the quick time period. However now, you recognize, clearly, all of us bought by these horrible 4 or 5 days the place we didn’t know what was gonna occur. How has that impacted you guys, notably I’m on the demand aspect?

Melissa Widner  18:25


Melissa Widner  18:40

Yeah, effectively, it’s attention-grabbing. Our chairman, Mark Verissimo, is ex-SVP, Silicon Valley Financial institution, and in reality, he was there for twenty-four years, and held virtually each C degree place throughout his time there aside from CEO, and his final job when he retired in 2016, was Chief Danger Officer. So he had loads to say, in actual fact, I’ve a podcast, a Lighter Capital podcast, the place we largely interview our Lighter Capital prospects. However on this case, we did one with Mark shortly after SVB collapsed. And actually, we’re doing one other one within the subsequent week to say type of eight months on what’s occurring within the banking trade. So so that is contemporary on my thoughts proper now. By way of the way it’s impacted us, these the 4 days have been actually irritating clearly, as a result of we banked there. SVB is an fairness investor in Lighter, in order that didn’t actually affect us. They’re an fairness investor. Fortunately, they weren’t the supplier of our capital. So our funding comes from a warehouse facility which is offered within the US by Apollo. And so fortunately, it wasn’t SVB or that might have been doubly irritating. It’s just about again to BAU. You recognize, they play in a special area than we do, that’s actually financial institution enterprise debt. They’re taking a look at corporations which can be enterprise backed and taking a look at funding, together with the enterprise spherical. So it’s by no means been a competitor to Lighter. It’s been actually complimentary. In truth, we refer numerous offers to these forms of corporations and vice versa. You recognize, they’ll see numerous corporations which can be too early for his or her funding for what they’ll lend to, and so they’ll, they’ll refer them to Lighter. However by way of the market typically, that market has turn out to be actually aggressive. So when SVB blew up, and you recognize, now they’re again to regular and appear to be working, you recognize, the identical method they did earlier than, earlier than March, underneath First Residents. However there’s numerous different corporations that moved into the area. HSBC took numerous ex-SVB folks. Stifel took numerous ex-SVB folks, JP Morgan has been on this area for some time. First Ctizens with SVB continues to be actually lively. So what I’ve heard from my pals in that area is that it’s only a dogfight. Very aggressive.

Peter Renton  20:55

Proper. Fascinating. Fascinating. So then, taking a look at your your small business now, they’re working in three totally different geographies, is the core providing the identical? Or do you form of tailor your choices for you recognize is it totally different in Canada and Australia than what it’s within the US?

Melissa Widner  21:12

No, B2B SaaS corporations have the identical wants in Australia as they do within the US. And it was attention-grabbing. We now have to have a separate warehouse facility supplier right here than than our US one. And, you recognize, the US facility needed to see, okay, let’s see if Australia actually works the identical method because the US. And you recognize, it seems, it does.

Peter Renton  21:35

That’s good to listen to. Good to listen to. Okay, so then I need to speak about losses. And, you recognize, clearly you’ve been doing this for some time. So that you’ve bought a reasonably lengthy observe file, you’ve additionally completed it by some tumultuous instances. However are you able to give us a way of type of the standard loss charge that your portfolio undergoes?

Melissa Widner  21:59

Lighter Capital has a 1.6% historic loss charge.

Peter Renton  22:03

Wow, that’s actually low. You need to be extra aggressive while you lend?

Melissa Widner  22:07

Nicely, that’s the query, proper? Yeah.

Peter Renton  22:11

How did that change through the pandemic?

Melissa Widner  22:14

Nicely, COVID really had the, for those who have a look at the the loss charge throughout COVID, it was virtually nothing. And that’s as a result of we’d we do mannequin in losses, that we’ll have losses. What we noticed in COVID, is that corporations, and sometimes when we have now losses is when an organization goes out of enterprise, so you recognize, simply doesn’t work for no matter motive, they’re out of enterprise. And what occurred, and keep in mind we’re not with these corporations endlessly. We’re with them for a yr. I imply, numerous corporations take a number of rounds. So we have now examples of the place we have been with them for, you recognize, eight plus years. However, you recognize, our typical mortgage length is three years. So what occurred throughout COVID is corporations that perhaps weren’t doing effectively earlier than COVID hit, and you recognize, wouldn’t have gotten the subsequent spherical of financing didn’t have sufficient funding to outlive. They bought these PPP loans and different authorities grants. And, and so they ended up surviving. So we really had, which is bizarrely decrease, a lot decrease loss charges throughout COVID. And it was one factor, it’s attention-grabbing, we have been simply, you recognize, we put collectively a pitch deck, type of in the beginning of this yr and speaking to some buyers, our losses for 2021 was like $2,000. And you then’re displaying our projected losses for the yr, as a result of we had, you recognize, we had recoveries, and also you’ll write one thing off after which recuperate, you recognize, however we’re displaying projected losses which can be regular historic charges going ahead. And we have now buyers saying why are losses going to go up a lot? We had $2,000 in that yr, it simply, so it was, it had you recognize, the other occurred then what we thought would occur. We thought when COVID hit, that it will, that losses would actually be loads greater than we had traditionally.

Peter Renton  24:04

Proper. So then what about demand? I imply B2B SaaS appears to be a very wholesome sector. We’re coming in the direction of the top of 2023. What’s demand been like this yr in comparison with earlier years?

Melissa Widner  24:18

So this yr, the primary half of this yr in comparison with final yr, was decrease, and what we, we’re cash that you’d take to develop. So it’s a lot inexpensive than fairness, but it surely’s nonetheless costly. You recognize, you’re taking debt, you’re paying again greater than you’re borrowing. So it’s tremendous low-cost in comparison with fairness, in comparison with promoting fairness. However for those who’re not going to take that cash to develop, it doesn’t make sense. So there was numerous uncertainty. I imply, there’s nonetheless uncertainty. There was numerous uncertainty within the first half of the yr and I’ve seen and going into Q3, we’re seeing an enormous pickup on this quarter. However the first half of the yr was slower than final yr. And I believe that, you recognize, we have a look at why our typical buyer involves us, you recognize, we don’t fund corporations who want cash to outlive, they’re going to die as a result of they’ll’t make payroll, you recognize, they’re not going to qualify for our funding. We’re funding corporations that you recognize, have a powerful buyer base, low churn, and so they perhaps need to rent, placed on some extra salespeople, they need to develop a brand new product, or there’s one thing, there’s some cash they’re searching for to be able to develop. So when there’s uncertainty round progress, corporations, you recognize, naturally type of pull again as you recognize, the great ones naturally type of pull again and say, Okay, let’s determine what’s going to occur right here. Let’s see what’s occurring out there. And I believe we noticed that within the first half of the yr.

Peter Renton  25:43

You talked about your credit score facility, and Apollo, clearly a fairly large title within the area. And I’m curious if this was, I examine it in August, I don’t know when that really while you closed it, however how was that means of elevating the brand new facility? And I imply, is that this one thing that, like, I observed that there’s no banks that appears like within the credit score facility that, in line with the article I learn, so inform us slightly bit in regards to the course of, and who’s type of collaborating in that credit score facility?

Melissa Widner  26:14

So we’re funded by a division of Apollo that, that’s their enterprise, is to supply credit score services to different lenders, they have been the identical supplier we had earlier than we renewed in July. So we’ve been with them now, about two and a half years. And I might say, it was a, we have now an extended observe file and a very good observe file. In order that’s useful, as a result of while you’re going out to boost a facility, particularly in a tighter market like this, that’s all that issues. You recognize, they’re not within the story, they’re taken with your knowledge –  present us what you’ve completed. You recognize, it’s a complete, it’s a lot totally different due diligence course of than, say, elevating enterprise capital, as a result of it’s all backward trying, virtually. I might say 98% is backward trying versus ahead trying. They usually’re in search of an extended observe file. So from that standpoint, you recognize, it was comparatively straightforward. However that stated, it was a a lot totally different market than it was two years in the past in 2021, simply because there’s numerous, you recognize, particularly for those who consider the time that we have been renewing our facility was in Q2, as a result of the renewal was up in July, or the renewal time was in July, that was a horrible time out there for credit score. SVB had simply collapsed. So it was not one of the best time to be on the market, most likely. I might have appreciated to have had extra funds competing for it that method. However with that stated, we have now um, Apollo has been an unimaginable companion to work with. We’re actually fortunate as a result of that partnership is so necessary. I believe till you run a credit score fund, you don’t admire a credit score, a lending firm, you don’t admire how necessary that relationship. It’s a a lot deeper relationship than most corporations would have with, say, their enterprise supplier, as a result of they’re basically offering our product.

Peter Renton  27:59


Melissa Widner  27:59

We don’t have a product if we don’t have that. Yeah, it’s the product.

Peter Renton  28:03

Sure, certainly. Okay. So final query, then, what’s your imaginative and prescient for the way forward for Lighter Capital? The place are you taking this?

Melissa Widner  28:10

Like I stated earlier, you recognize, Lighter has a very robust relationship with the shoppers. We are saying we’re greater than cash. And we actually are greater than cash. That is, you recognize, this isn’t the place you’re going simply to get cash to fund your small business. But it surely’s to hitch a neighborhood of different CEOs we have now. We funded over we’ve completed over 1100 rounds of financing, we have now a neighborhood of tons of of B2B SaaS CEOs, and numerous them are in the identical boat. So that is the place to return to search out out what’s occurring in B2B SaaS to you recognize, construct your neighborhood round others, you recognize, B2B SaaS CEOs, we have now CEO teams, we have now our CEO Summit, we have now a bunch of different perks which can be obtainable for our corporations. And we are also, we’ve simply launched one thing that’s fairly thrilling known as Lighter Analytics in our servicing portal. You recognize, we have now all the information on all of our corporations, as a result of we’re plugged into their accounting platform and their banking platform, and their billing programs. So we’re now giving them again their knowledge in a method that they’ll use it.

Peter Renton  29:12

Fascinating. Okay, Melissa, nice to talk with you. Actually loved our dialog. Thanks a lot for approaching the present.

Melissa Widner  29:18

Yeah. Thanks, Peter. Nice to be right here.

Peter Renton  29:22

Nicely, I hope you loved the present. Thanks a lot for listening. Please go forward and provides the present a overview on the podcast platform of your alternative and go inform your pals and colleagues about it. Anyway, on that word, I’ll log off I very a lot admire you listening, and I’ll catch you subsequent time. Bye.

  • Peter Renton

    Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media firm targeted on fintech. Peter has been writing about fintech since 2010 and he’s the creator and creator of the Fintech One-on-One Podcast, the primary and longest-running fintech interview sequence.

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