Efficient Capital Labs Raises $11 Million for Revenue-Based Financing

Efficient Capital Labs (ECL) has raised $11 million in Series A funding to expand its cross-border revenue-based financing offering for B2B software-as-a-service (SaaS) companies operating in the South Asia-U.S. corridor.

The company, which already operates in the United States and India, will use the new funding to expand into Singapore and other Southeast Asian markets, according to a Wednesday (Aug. 21) press release.

Cross-border companies operating in the South Asia-U.S. corridor have not received the funding they should, because they have been evaluated as a series of siloed companies in different countries rather than as a global organization, Kaustav Das, co-founder and CEO of ECL, said in the release.

“ECL is the only revenue-based financing company that evaluates a business’ revenue across every geography to provide a holistic risk assessment, rather than simply looking at one cog in the wheel,” Das said.

ECL was co-founded in 2022 by Das and Manish Arora, according to the release. Today, it has 25 employees in the U.S. and Canada. By the end of the year, the company plans to add between 30 and 35 employees, including a chief revenue officer/chief marketing officer, a head of business development and partnerships and additional engineers.

The company has made these plans after increasing its accounts receivable sixfold from 2022 to 2023, and then doubling that number again in the first six months of 2024, the release said.

ECL attributed this growth in part to default rates that are “way below” industry standards and 70% of customers returning to the company for additional financing, per the release.

“Historically, revenue-based financing has typically not been as popular in developing countries like India, but in the past two to three years with the reduced availability of [venture capital (VC)] funding and venture debt markets being challenged, people have started to turn to alternative financing that was not there before,” Arora said in the release.

This news comes about 13 months after ECL closed a $7 million funding round. When announcing that round in July 2023, the company said it had 43 SaaS customers and more than $13 million originated in loans.

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