Investments
Skalar, a New York-based fintech, publicly launched on Thursday with an undisclosed seed round led by São Paulo-based Monashees and a debt financing partnership with General Catalyst’s Customer Value Fund. The company aims to finance customer acquisition costs for technology startups without taking equity or requiring fixed repayment schedules. Since its inception in January, Skalar has committed to funding over $125 million in sales and marketing spending across seven technology companies over the next 12 months. The model is straightforward but unusual: Skalar provides capital for sales and marketing initiatives, and startups repay from the revenue generated by the customers acquired with that capital. If those customers generate less revenue than expected, Skalar absorbs the shortfall rather than demanding full repayment. Current deals generally call for Skalar to collect about 1.1x the amount provided. For example, if a company spends $10 to acquire a customer and expects that customer to pay $1 per month for 30 months, Skalar provides the initial $10 and collects the first $11 that customer generates. Once that repayment limit is reached, the company keeps the remaining revenue. But if the customer cancels after eight months, Skalar collects only $8 and writes off the balance, according to co-founder and CEO Sebastián Cárdenas. “We only get repaid as they get repaid,” Cárdenas told Crunchbase News. Notably, repayment is tied to customer revenue, not a fixed schedule. A company that recoups acquisition costs in one month repays in one month, while one that takes 12 months repays over a year. The obligation remains contractual, but the flexible timeline reduces cash crunch risk. Skalar’s structure differs from venture debt and revenue-based financing. Venture debt offers flexible funding without equity dilution but carries higher interest and risk. Skalar’s founders argue that repaying such debt can force startups to cut sales and marketing or hoard cash when growth opportunities arise. Revenue-based financing typically advances money based on signed contracts or existing revenue; Skalar finances a potential new revenue source before it exists and accepts the risk it may never materialize.
This risk means Skalar closely examines a company’s operations, analyzing detailed transaction data to determine customer acquisition costs, retention, and revenue over time. It is highly selective about whom it finances. The system continually updates assessments as new information arrives, 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,” he said. The arrangement carries risks for startups. Skalar sets minimum revenue targets; if results fall below, it can require faster repayment or stop providing additional capital. Terms are based on estimates involving customer revenue, profit margins, currency fluctuations, and attribution of sales to specific marketing investments. If estimates prove wrong or acquisition costs rise, the startup may benefit less than expected. Importantly, Skalar’s agreements do not give it the right to seize assets in default, nor do they require borrowers to maintain specific financial benchmarks or cash balances. Still, founders must weigh the possibility of accelerated repayment or interrupted funding. “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,” Cárdenas said. “This incentivizes us to always be mindful of not encumbering the company.”