The funding round was led by Soma Capital (New York-based backers of Deel, Razor Pay and Rippling) and FoundersX (the investors behind Jeeves and Salt Security)
Tranch, a buy now pay later (BNPL) platform for SaaS sellers and services providers, has raised $100 million in seed equity and debt funding to bring payment flexibility to a wider pool of B2B customers.
The funding round was led by Soma Capital (New York-based backers of Deel, Razor Pay and Rippling) and FoundersX (the investors behind Jeeves and Salt Security). Additional institutional investors participated in the round, including several US and UK fintech founders. The funding round includes a credit facility from Clear Haven Capital Management. Tranch’s existing investors include Global Founders Capital and Y Combinator.
Businesses spend over $29 trillion on invoice payments in the US every year*. Moreover, most invoices are payable within 10 to 30 days, which puts significant pressure on both suppliers and customers’ working capital alike. Tranch was created to transform these payments for both parties. Suppliers that offer a ‘Pay with Tranch’ checkout get paid upfront, while their customers can settle invoices worth up to $500,000 on terms that suit them, ranging from two to 12 months.
In a challenging macro-economic environment where over 40% of B2B transactions are still settled by check** and nearly 50% of B2B invoices are overdue***, Tranch is bringing to the B2B market a level of flexibility and choice that significantly improves cash flow management for both suppliers and customers and is gaining traction quickly.
After beta-launching in the UK, Tranch was accepted into the Y Combinator accelerator and launched in the US. Now primarily focused on growth in the multi-trillion dollar US B2B invoice market, Tranch has already spread out millions of dollars of invoices across multiple verticals in the services and SaaS industries. In the six months to the end of 2022, monthly invoices spread into flexible payments via Tranch’s platform increased tenfold. Early service providers offering a ‘Pay with Tranch’ payment option include New York-based procurement platform Tropic and international law firm Goodwin Procter LLP.
Philip Kelvin, Co-founder & CEO of Tranch, comments: “Since securing our pre-seed funding and completing the Y Combinator programme, the total value of invoices we’re handling every month has increased tenfold. Traction is growing fast because suppliers and business buyers alike simply understand and like what Tranch can do for them. Against this challenging macroeconomic backdrop, buyers and suppliers have to ensure they can optimise their working capital cycle, and B2B BNPL is a commonsense way to achieve that. With our new investors and substantial credit facility in place, we’re in a great position to continue our growth in the US market out of our New York office so that every SMB that needs it can ‘pay with Tranch’ – flexibly and on their own terms.”
Aneel Ranadive, Founder, Soma Capital: “Tranch is leading the way to open up B2B flexible payment options beyond the ecommerce and marketplace sectors. Every year SaaS and other service providers like law firms, marketing agencies and consultancies generate billions of dollars worth of large invoices on terms that don’t work for them or their customers, simply through lack of choice and innovation. ‘Pay with Tranch’ provides them and their customers with an alternative way to handle payments. With Tranch, payments no longer have to be a hurdle but an enabler to business growth.”
Mark Simmer, Managing Partner, Clear Haven Capital Management: “We’re excited to partner with Philip and the expanding Tranch team as they rewrite the way businesses pay for their SaaS and services invoices. We look forward to supporting them with capital to achieve their next stage of growth and help more businesses across the US make better payment choices.”
Proceeds of the investment will be used to grow the team in Tranch’s New York office and expand the ‘Pay with Tranch’ checkout across multiple industry verticals.
Source: Company Press Release