Dear Friends
We are proud to have supported SaaS founders raising over €20 million from VC and debt investors in 2022. Two cases represent subsequent funding rounds, an outstanding achievement as only a fraction of startups raise follow-on rounds and become scaleups.
AdScanner, an AdTech SaaS company, closed a Series A round of €5 million
edrone, an eCommerce CRM SaaS company, closed a Venture round
Gatenox, a KYB SaaS platform company, closed a Seed round of $2.5 million
ValueBlue, an enterprise SaaS company, closed a Series B and Debt round of $11 million
Going into 2023, it has become even more challenging for quality European SaaS startups to raise follow-on rounds as public market SaaS valuations have drastically declined to their pre-2019 levels. As a result, inside investor short-term runway extensions are necessary, and VC-backed SaaS founders are challenged to run dual-track processes. This means simultaneously looking for follow-on venture capital, venture debt and revenue-based financing and, in addition to this, seeking out strategic buyers. All the same, founders have to become more cash efficient and, in some cases, cut costs to the bone to secure short-term survival. While the playbooks for all these activities differ, enough overlaps make it doable with good planning and grit execution.
We have solid insights into the approaches and investment criteria of venture capital firms, venture debt, revenue-based finance providers, and strategic buyers through our work with numerous European SaaS startups engaged in dual-track processes. We are particularly concerned with the imbalance of knowledge between founders and investors and are dedicated to providing founders with helpful guides and expert support. Our latest publication simulates how capital efficiency affects a SaaS founder’s ownership stake after multiple rounds of venture capital funding. Remember that for every completed transaction, there are several non-binding offers and up to a hundred initial conversations. In addition, many assignments still need to come to fruition, especially strategic exits for cashflow-negative SaaS startups with ARRs below €5 million.
Finally, on behalf of the VarsoGroup team, we want to thank all of our clients a thousand times for their trust in us 🙏
Our services remain unchanged in both good and challenging times. We offer customized guidance to European SaaS founders and investors before, during, and after minority dilutive equity investments or non-dilutive debt funding rounds and majority M&A transactions. These services include preparing for an equity or debt funding round or exit sale, creating a business plan and pitch deck, reaching out to investors and following up with them, evaluating deal terms, providing support during due diligence and negotiations, preparing board reports, and ongoing assistance with financial management and the development of SaaS key performance indicators (as a fractional CFO) between funding rounds.