Lighter Capital, a Seattle-headquartered financing lender, is making its debt financing offerings, including term loans and lines of credit, available to the Canadian market. The expansion of the firm’s debt financing business is aimed to offer Canadian startups an alternative to venture capital and bank financing.
“What we’ve done is create a fast, easy way for revenue-generating startups to access financing.”
Lighter Capital is a FinTech company that provides founders with up to $3 million of non-dilutive growth capital. The company claims it can do this in a fraction of the time it takes to raise from traditional sources. Rather than taking equity, Lighter Capital takes a portion of monthly revenues over the life of the loan. Lighter Capital does not require board seats, warrants, or personal guarantees from its borrowers.
“There’s no question that debt is the most cost-effective form of capital for early-stage companies,” said Thor Culverhouse, CEO of Lighter Capital. “Equity is comparatively very expensive, especially for early-stage entrepreneurs. What we’ve done is create a fast, easy way for revenue-generating startups to access financing without having to give up any equity or control.”
Lighter Capital said it is already in talks with Canadian startups and plans to open an office in Vancouver in April. The new office’s team will focus on growing its presence in Canada. In January, the firm secured access to $100 million USD to lend to startups.
Since 2012, Lighter Capital has deployed over $200 million into more than 350 US-based startups in over 650 funding financing rounds. The firm claims one-fifth of those startups have had a successful exit, including Jive Communications, MapAnything, and Steelbrick.
Lighter Capital gives startups access up to $3 million in growth capital and working capital. The funding comes with no dilution and startups retain full control over how to use the funds. Lighter’s FinTech platform pulls in 6,500 data points and uses algorithms to determine a credit rating. The firm says its platform predicts a startup’s revenue growth with 97 percent accuracy on average.
Lighter Capital has partnered with the Canadian outpost of global startup acceleratorFounder Institute, in order to provide startups with the advice and support needed to grow their companies. A spokesperson from Lighter Capital said it is still working through the formal details of the partnership with the Founder Institute. The Institute is expected to provide Lighter Capital with access to its network and the two organizations will conduct joint events.
“With the arrival of Lighter Capital, we see an immediate alignment with the kind of tech startups that Canada has been producing with such success and we are excited to be working with them,” said Sunil Sharma, chapter director of the Founder Institute Toronto.
The expansion comes a few months after another Seattle investor, Voyager Capital, expanded to Canada. Voyager focuses on startups in Western Canada and the Cascadia region. Meredith Powell, venture partner at Voyager Capital, said she has seen a greater need among startups for access to venture capital and debt financing.
“Lighter Capital is a trailblazer in the area of debt-based financing and I have little doubt that, given the increasing demand for their services, they’re positioned for success across the nation,” Powell added.
Image source Lighter Capital via Facebook