Revenue-Based Finance Provider Efficient Capital Labs Secures Series A Funding Co-Led by QED and 645 Ventures Efficient Capital Labs (ECL), one of the leading revenue-based financing providers that provide non-dilutive capital to B2B SaaS companies in the South Asia-U.S. corridor, has announced fundraising of USD 11 million.

Efficient Capital Labs (ECL), one of the leading revenue-based financing providers that provide non-dilutive capital to B2B SaaS companies in the South Asia-U.S. corridor, has announced fundraising of USD 11 million.

The Series A fund was co-led by QED Investors and 645 ventures including participation from existing investors such as Riverside and Generalist. New investors like FJ Labs and Eudemian Ventures also participated in the funding.

ECL said that the funds raised will be used towards expansion into the Singapore and Southeast Asian markets, building on the positive traction seen in markets like the USA and India where the company has amassed upwards of USD 70 million in financing and tripled that, serving over 100 companies between the period of Q1 2023 to Q2 2024.

"We are doubling down on what we have seen since day one – that the South Asia-U.S. corridor is highly devoid of funding for the simple reason that any cross-border company is never evaluated as a global organization, only as a series of siloed companies in each country," ECL co-founder and CEO Kaustav Das said. "As a result, cross-border companies get the short end of the stick and never get financing up to their potential."

ECL currently lends to cross-border companies that maintain at least one entity in the US and is the only revenue-based financing company that provides loans in both the Indian Rupee and the US Dollar. The company also claimed that by the end of 2024, Singapore Dollar-denominated loans will also be extended.

"We have been amazed with the unit economics, credit performance, and growth that Kaustav and Manish have been able to achieve since our initial investment over a year ago," said QED Investors Partner and Head of Asia Sandeep Patil.

"They have surrounded themselves with a terrific team and we are excited to double down on our partnership -- this round sets the company to explode its TAM and achieve escape velocity," Patil added.

Aaron Holiday, Co-founder and Managing Partner at 645 Ventures, said, "ECL's innovative approach to revenue-based financing for cross-border B2B SaaS companies in the South Asia-U.S. corridor is a game-changer.

ECL co-founder Manish Arora opines that since VC markets are still constricted and valuations are suppressed, people are prompted to look at alternative funding options, irrespective of the amount of money raised.

"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 VC funding and venture debt markets being challenged, people have started to turn to alternative financing that was not there before," added Arora.

In April 2022, ECL raised a USD 3.5 million seed round led by 645 Ventures, followed by a USD 15 million debt fund in the same year, which was later updated to a USD 100 million SPV and a further USD 7 million Pre-Series A round in July 2023.