Pipe was launched in 2019 with the goal of providing SaaS startups with funding options other than equity or venture loans. The Miami-based fintech’s objective was to provide a means for SaaS companies to receive money upfront by connecting them with investors on a marketplace that paid a reduced rate for the annual value of those contracts. “A verified set of financial institutions and banks,” Pipe said of its buy-side participants. The platform’s purpose was to give enterprises with recurring revenue streams access to money so they wouldn’t have to take out loans or dilute their ownership by accepting outside funding.
Over time, the company’s executives realized that their concept might be applied to other industries. So, in March, the business announced that its platform will now be available to “any company with a recurring income stream,” rather than just SaaS enterprises. That might include D2C subscription providers, ISPs, streaming services, or telecommunications corporations, it warned at the time.
According to co-founder and co-CEO Harry Hurst, even VC fund admin and management fees were being funneled through its network. Pipe said today that it is expanding into a new industry while also completing its first acquisition, purchasing London-based Purely Capital, a media and entertainment financing firm.
Hurst, who was born in the United Kingdom, met the company’s CEO and co-founder Wayne Marc Godfrey during his time under lockdown during the COVID-19 pandemic. “We met through one of our investors and have mutual contacts,” adds Hurst, who was in London for the construction of Pipe’s new headquarters.
He discovered that in order for independent film production firms to be able to move on to their next projects, they needed to be able to raise funds. Without the big finances of major streaming firms like Amazon, Disney, Hulu, and Netflix, these little businesses were frequently stuck in limbo, waiting three to five years to get their money returned and go on to their next project.
Pipe has developed a new media and entertainment division on its platform as a result of its purchase of Purely Capital, allowing independent distributors to trade their revenue streams in the same manner that a SaaS company could. “In 2020, $220 billion was spent on streaming entertainment, and in 2021, $250 billion,” Hurst stated. “That’s a massive year-over-year increase.” Independently created content outnumbers major film studios by more than 65 percent, making it the majority of the market. This is a vertical that we find tremendously interesting and where we see a huge possibility.”
Hurst will not reveal how much Pipe paid for the business. Purely Capital had received $150 million “from a range of institutional lenders and banks,” according to Variety in March of 2020. The company had only recently launched its entertainment fintech receivables platform at the time. In total, the company has facilitated the purchase of more than 250 titles from its consumers, totaling more than $45 million in income. Godfrey has been named general manager of Pipe’s new division, and his staff of five will assist in its management.
Hurst, who conducts his company with a similar mindset, was drawn to it because of its lean team. Pipe, which bills itself as the “Nasdaq for revenue,” has raised a total of $316 million since its start. It’s most recent funding round was a $250 million round announced in May, valuing the company at $2 billion. It now employs roughly 80 people, or “plumbers,” as Pipe refers to them. “We’re quite proud of the fact that we established this company with such a small team in comparison to our size,” Hurst added.