Pipe, a marketplace for future recurring revenue streams, has raised $250 million at a $2 billion valuation.
Companies get upfront, nondilutive capital on Pipe and pay the money back via future revenue streams, allowing them to do things like hire more salespeople or buy ads to drive growth, said Pipe CEO Harry Hurst.
Institutional investors provide the upfront cash in exchange for future revenue that the selling company will provide, typically over 12 months. Pipe takes a fee of up to 1%.
Originally focused on software-as-a-service startups with predictable revenue, Pipe now is open to all types of companies, such as property management companies, direct-to-consumer subscription companies, health care and even venture capital firms with fund management fees.
"As an asset class, we're unlocking and making fully tradable and liquid the recurring revenue streams for companies of all sizes," Hurst said. "Even since we started we always had a vision of unlocking recurring revenue as an asset class."
For investors, the asset class looks like fixed-income products that have predictable performance, Hurst said. They also have the option of choosing different types of revenue streams depending on their risk appetite, he said. Yields range from low single digits to double digits.
Greenspring Associates led the round.