There was a time, not too long ago where Series A rounds were in the $3M – $5M range, now those numbers are normal for seed and A Rounds, well they run the gamut. The reality is companies are at many different points in their lifecycle when they raise a Series A so comparing one company’s A to another doesn’t work.
Today was a great example – Vendr, a fast-growing startup that helps companies manage their SaaS subscriptions announced a monster $60M Series A round. So how did they pull this off?
Well the reality is, while this was a Series A round for Vendr, their metrics were probably much more aligned with a company raises a Series C or D round. Ryan Neu shared a bit more about the growth they saw last year in an interview with Techcrunch:
According to an interview with Vendr CEO Ryan Neu, his startup grew just under 5x in 2020, and was cash flow-positive last year as well. The startup’s model of standing between SaaS buyers and sellers, speeding up transactions while lowering their cost, appears to have fit well into 2020’s twin trends of rising software reliance and a focus on cost-control.(Source – Techcrunch)
For those keeping score you probably know that not many startups are cash flow-positive at Seed, or Series A, or even Series B most of the time, especially when they’re seeing growth at a 5x clip. When a startup can pull this off then VC money becomes cheap, and I’m guessing that’s what happened here.
This is also probably why Tiger Global, a hedge fund that has an eye for tech startups really liked this deal, high growth and profitable – yes and yes. For those who missed the memo, Tiger Global is in the process of raising a new $3.75B fund after closing their most recent fund just last year. They should have no trouble doing this after their performance last year….
Chase Coleman’s Tiger Global earned its investors $10.4 billion in 2020 — the most of any hedge fund that made the annual list of the top 20 managers compiled by London fund-of-funds firm LCH Investments.(Source – InstitutionalInvestor.com)
All this being said, a Series A round is all about taking a product that has found product market fit and scaling it, and with $60M in fresh funds to scale with, something tells me Vendr is going to be joining the unicorn club very soon 🦄
Congrats to Ryan and team and another great pick by Tiger Global 🚀