FactorialThe startup “Unicorn” based in Barcelona which provides an all-in-one HR platform in the Cloud for small and medium-sized enterprises, has picked up a non-dilutive general catalyst (no equity) from the general catalyst-the money it will indicate in a specific field: “essential market activities” or GTM, the umbrella term used for the broader expenses sales.
The company initially reduced its teeth in the boom of HR services which came with the social distancing of the COVVI-19 pandemic, via a “ free ” version of the product which has become viral and has accumulated more than 60,000 users. Shortly after, it was paid only, and CEO and co-founder Jordi Romero told Techcrunch in an interview that it had seen customers and income develop six times in the past year, reaching 13,000 paid companies. Factorial will use his latest cash injection to take advantage of this momentum.
The news of Factorial on the collection of more money to turboch its sales and marketing arrive, by coincidence, at a time when HR sales and marketing activities are suddenly in the spotlight – although not particularly brilliant: Deel and Ocplinging, two largest HR startups which have a major legal history. The undulation continues Deel, alleging that he has worked with a spy to steal information on customers and sales and marketing strategies. Deel denies allegations.
From what we understand, Factorial performs an internal investigation to ensure that “there is nothing happening”, that is to say has His business recalls the allegations of the trial.
Having funds for the market – as factor does – is a way of developing a sales funnel. However, unfortunately among SaaS companies, poaching and other aggressive tactics to guarantee talents, tracks and strategy. But with these factorial costs of $ 120 million, he clearly has a window to position himself far from these drama and victory activities.
To be clear, this money is not An investment in equities, and it is not the most classic form of venture capital debt. The money leaves the “customer value” fund of General Catalyst. It is indeed a non -dilutive loan (no participation in shares involved) that Factorial will reimburse its cash flows – in particular the gross profit of customers that GC money has helped to acquire.
The money that Factorial has recovered over the years with regard to shares – the last round was $ 120 million to an evaluation of $ 1 billion in 2022 – remains intact. And although GC does not obtain any equity in the investment, it sets up a relationship which could lead to a future series of capital funds.
From what we understand, the factorial does not currently seek to soon increase a large part of the primary actions. More likely, it will increase a secondary turn to give investors and previous employees a certain liquidity.
As Romero has described, the General Catalyst’s customer value strategy works a bit like an action fund (less participation in shares). It removes money from a number of startups that wish to increase their GTM, and follows performance through the portfolio, more like equity investment, which means that there is no guarantee as you would indebted. Some in the swimming pool can flow, some can swim and the latter is BET GC.
“Unlike the debt, the company has no lower risk because GC has the risk of decline if the marketing investment does not work,” said Pranav Singhvi, the MD of General Catalyst who had the idea and directs the fund, told Techcrunch by e-mail. He added that the typical company which obtains funds in this way is at a higher or public stage – with “demonstrated coherence” in sales and marketing. (Singhvi also spoke for a long time of customer value in this podcast in October 2024.)
Factorial has now borrowed $ 200 million from GC under these conditions after picking up $ 80 million under the same conditions April 2024.
Sanghvi has said that GC now has assets under management in the range of “10 figures” (that is to say billions) of its customer value efforts, which have been taking place for four years now. In general, in one month, it deploys hundreds of millions of dollars in SaaS, directly to consumers, fintech, games and other types of businesses. “We believe that this is a key element in the way companies will finance their growth in the future,” he added.
