The software-as-a-service (SaaS) industry is facing budget constraints and staff reductions as a result of the pandemic and the broader technology slowdown. Companies have tightened their budgets for SaaS purchases, looking to keep cash on hand while growing more efficiently.
That’s why Kush Kella and Ahmed Sharif founded vartana (which my colleague Mary covered recently). While working together at fleet management company Motive, Kella and Sharif say they dealt with the aches and pains caused by broken SaaS contract management and rigid payment infrastructure. After years of seeing deals fall through due to a lack of payment flexibility, they left Motive to build Vartana, with the goal of equipping companies with a managed platform that helps sales reps close deals.
“Vartana is beneficial for both sellers and buyers of SaaS services and hardware products,” Kella told TechCrunch in an email interview. “It gives providers new tools to close deals and generate cash with prepaid deals, while offering buyers multiple payment options and a simplified shopping experience, ensuring buyers can buy the best technology available to grow your business”.
Vartana announced today that it has raised $12 million in a Series A round led by Mayfield with participation from Xerox Ventures, Flex Capital and Audacious Ventures, bringing its total raised to $19 million. Vartana has also secured a $50 million credit facility from i80 Group, which Kella says will ensure that the financed deals can be managed through Vartana’s new capital market.
“With the launch of the c for vartanacapital market, vartana it no longer has the buyer’s debt on its books, ensuring a business with a light balance sheet,” Kella said. “We focus on efficient and efficient growth. We have found great success in the SaaS industry and we are doubling down.”
Vartana’s platform, which Kella refers to as a “closing-sales” platform, is designed for use by business-to-business vendors of software, hardware, and hardware combined with SaaS software. Vartana helps manage tasks such as contract tracking, payment terms and signature capture, accepting a range of different payment options (eg full payment, deferred payment) and payment plans. Sellers can submit multiple quotes at once and give buyers the flexibility to select which payment style is best for them. Once the payment has been selected, the buyer can electronically sign the agreement from the web or mobile device, finalizing the deal.
Image Credits: vartana
On the capital market side, the algorithms developed by Vartana normalize the data, qualify each buyer and expand the debt financing offers. The platform matches buyers’ loan applications with a network of banks and lenders, allowing buyers to apply for funds and receive real-time quotes.
“When deals are financed, whether traditionally through a bank or through the Vartana platform, sellers get paid from day one,” Kella said. “You get a new non-dilutive cash flow for the entirety of a deal, sometimes up to five years of future cash, and buyers don’t have to pay upfront, which means they can keep cash in their bank account and pay a monthly fee. , making sure they stay agile and can invest cash in the areas of their business that need it most.”
Working with “dozens” of sales departments at companies like Verkada, Samsara and Motive and more than 10,000 buyers, Kella says, Vartana competes with startups like Ratio, Cashflow and Gynger. Ratio has been particularly successful of late, bagging $411 million in equity and credit last September. But he doesn’t see them as direct competitors, noting that Vartana’s model relies on providing financing to buyers and targeting late-stage tech companies.
On the subject, Vartana recently launched a closing platform that allows sales reps to “market” financing and deferred payments to any buyer. “This is particularly important in a world where cash is king and companies are looking for ways to keep cash on hand,” Kella explained. “Offering self-service financing as an option for all buyers helps buyers keep cash and pay for products over time, while sellers gain access to full contract value from day one.”
Kella did not answer a question about Vartana’s income. But he said financing volume grew 600% year-over-year, while the company’s workforce increased fourfold. The plan is to further increase the size of the workforce from 40 employees to 85 by the end of 2023.
Patrick Sayler, a Mayfield partner and a Vartana investor, added by email: “In business-to-business enterprise software, time kills all transactions. This is especially true in the deal-closing process, where there is a staggering amount of back-and-forth back and forth between supplier, buyer, and financing teams that takes weeks and sees deals move to the next quarter or die all together. together. Vartana’s business-to-business financing and closing platform puts an end to this with a fully digital payment platform with integrated proposals, signatures, payments and self-service financing, improving conversion, sales cycles, sales values orders and cash flow management, obviously critical in today’s economy.”
