Skalar Launches With $125M in Committed Financing

Skalar has committed to finance more than $125 million in sales and marketing spending across seven technology companies in its first 12 months — without taking equity or demanding repayment on a fixed schedule.

The New York-based fintech publicly launched Thursday with an undisclosed seed round led by São Paulo-based venture firm Monashees, plus a debt financing partnership with General Catalyst's Customer Value Fund. The seed round closed in the first quarter; Cárdenas described it as large by Latin America's standards. Nido Ventures and several angel investors with relevant industry experience also participated. General Catalyst is providing the debt capital Skalar will use to finance its customers' spending, though the size of that partnership was not disclosed.

Financing tied to customer revenue

The model works like this: Skalar provides startups with capital to fund sales and marketing initiatives. The startups repay it out of the revenue generated by the customers acquired with that capital. If those customers generate less revenue than expected, Skalar absorbs the shortfall rather than requiring the company to repay the full original amount.

Skalar's current deals generally call for it to collect about 1.1x the amount provided. Consider a company that spends $10 to acquire a customer expected to pay $1 per month for 30 months. Skalar provides the initial $10 and collects the first $11 that customer generates; the company keeps the rest. If the customer cancels after eight months, Skalar collects only $8 and writes off the balance.

"We only get repaid as they get repaid," co-founder and CEO Sebastián Cárdenas told Crunchbase News.

There is no repayment deadline. A company that recoups its acquisition costs in one month repays Skalar in one month; one that takes 12 months repays over a year. The obligation remains contractual, but Skalar operates on the premise that a flexible timeline reduces the risk of a cash crunch.

How it differs from venture debt and RBF

The structure differs from both venture debt and existing revenue-based financing, according to Cárdenas. Venture debt offers flexible funding without dilution but carries higher interest and risk. Skalar's founders argue that servicing that debt can force startups to cut sales and marketing spend or hoard cash just when new growth opportunities appear.

Revenue-based financing typically advances money against signed contracts or revenue a company already generates. Skalar instead finances a potential new revenue source before it exists — and accepts some of the risk that it may never fully materialize.

That risk forces deep diligence. Skalar analyzes detailed transaction data to determine how much a company spends to acquire customers, how long those customers stay, and how much revenue they generate over time. Its system continually updates company assessments as new information comes in, according to co-founder and COO Daniel Castrillón.

"We have become experts in understanding these types of risks and when they are sufficiently predictable and sufficiently profitable to be underwritable," Castrillón said.

The risks for founders

The arrangement is not risk-free for borrowers, Cárdenas concedes. Skalar sets minimum revenue targets. If results fall below them, it can require faster repayment. It can also stop providing additional capital under certain circumstances, potentially leaving a company without funding it had expected to receive.

Its terms rest on estimates involving customer revenue, profit margins, currency fluctuations and attribution of sales to particular marketing investments. If those estimates prove wrong, or customer acquisition costs rise, the startup may receive less benefit than expected.

There are meaningful protections, though. Skalar's agreements do not give it the right to seize a company's assets in a default, and they do not require borrowers to maintain specific financial benchmarks or cash balances.

"Our structure is fundamentally different because it absorbs most of the downside risk … and we are unlikely to walk away unscathed if something bad happens. This incentivizes us to always be mindful of not encumbering the companies we work with with credit risk, as this ultimately increases risk for us," Cárdenas said.

A narrow initial customer base

Skalar targets technology companies spending between $100,000 and $3 million per month on customer acquisition, with a consistent record of earning more from customers than they cost to acquire. It also weighs whether a company has enough cash to survive until the customer revenue arrives.

Its first seven customers include four or five Latin American companies as well as U.S. businesses. Skalar plans to work with no more than 15 companies per year initially.

The General Catalyst connection

Skalar grew out of Cárdenas' work as an entrepreneur-in-residence at Monashees, where he introduced several portfolio companies to General Catalyst's Customer Value Fund model. General Catalyst pioneered a similar approach but increasingly focused on larger deals, according to Cárdenas — leaving an opening to serve smaller companies, including Latin American startups.

"The best companies are thoughtful about matching their sources and uses of capital: equity for transformative but unstructured product and R&D bets, low-cost, duration-matched capital for predictable investments like customer acquisition," Andrew Ziperski, partner at the Customer Value Fund, said in a statement. "Most technology companies in Latin America have never had the choice, and Sebastián came to us with that gap in mind."

Skalar is not restricted to companies tied to General Catalyst or Monashees. Monashees general partner Caio Bolognesi said his firm has no access to the confidential operating data startups provide to Skalar during evaluation.

For Monashees, the model addresses a long-standing shortage of growth financing in Latin America. The firm, the largest venture firm in Brazil, has watched companies with strong customer performance struggle to raise capital as regional equity investment rose and fell.

"We've seen capital flow into and out of the growth stage, leaving some excellent companies struggling to raise the equity they need to keep growing," Bolognesi said. "Skalar fills that gap by giving promising companies access to capital while they build the track record investors want to see."

A market beyond venture-backed startups

Skalar is initially focused strictly on customer acquisition financing. Its founders eventually envision similar products for other business expenses that produce sufficiently predictable returns.

Cárdenas sees a longer-term opportunity beyond the small circle of companies that can attract institutional venture capital. Businesses passed over because of location, industry or growth rate could still qualify based on financial performance alone.

"Venture capital solved the problem of funding the top 1% of tech businesses," he said. "But 99% of tech businesses — out of which I'd say probably more than half could be underwritten by our product — just don't have access to capital today, and ours is a product that fundamentally changes that."

If the underwriting holds up through a downturn, Skalar's bet is that performance-based capital can reach a far larger group of companies than venture capital ever will — while giving venture-backed startups a way to fund predictable growth without surrendering more ownership.