- Capital raised new funds worth USD 9 million for developing an “AI-based capital machine.”
- The company is creating a program to help start-ups expand their global presence.
Capital raised funding worth USD 9 million for start-ups in AI-based “capital as a service (CAAS)” category. An interesting group of investors preceded the funding. Investors such as Jerry Yang’s AME Cloud Ventures, with involvement from Steve Jurvetson’s Future Ventures, Partech, Greycroft, and Wavemaker Partners, took part in the process. Also, renowned angel investors comprising Rentech and First Round Capital’s, Howard Morgan and Stuart Roden, preceded funding for the AI-based Capital Machine.
In the US, in 2019, over 10,000 start-ups raised more than USD 133 billion in project financing, along with a high percentage of that as equity investments. The key aim of Capital is to develop a platform for start-ups considering alternative routes to financing.
Nick Adams of AME Cloud Ventures, said, “Capital is doing something unprecedented in the private capital world.” Until now, it has been a very outdated and manual process to get access to large private financing. However, with the use of machine learning (ML), AI, and classification algorithms techniques, Capital can help founders to comprehend their true cost of capital and avoid any extra losses in order to scale.
AI-based “Capital Machine” uses data of the company to guide on how to optimize data if one is making at least USD 5 million in annual recurring revenue.
Also, Capital plays an important role in the industry by being a center of major trends, such as machine learning and fintech. Fintech platforms have been used recently to support the industries facing the COVID-19 crisis. Thus, Capital is making the fundraising method simple, transparent, and faster for advanced enterprises with more than USD 5 million of revenue, whether mission-supported or bootstrapped.
The founder of Future Ventures, Steve Jurvetson, said, “The transparency created by the Capital Machine can move our industry forward and remove bias from the system as well.”
Co-founder of Capital, Blair Silverberg, along with Chris Olivares and Csaba, said that in the last eight months, the company has mostly been “heads down building the Capital Machine.” This means its consumers have total yearly sales of about USD 3 billion. So, undeniably, there are consumers onboarded.
The major aim of Silverberg behind Capital was to use enhanced technology like AI and software-as-a-service to increase the interest of consumers in fintech and run other financial services online to boost start-ups as an alternative for CFOs and founders. Thus, this could be a win-win situation for financiers and those getting funded.
Silverberg said, “A tech company does not instantly mean a risky company these days.” It’s interesting that tech companies till now not had the tools to slice and dice into the financial sector. The key aim was always to target tech industries as they are the key source of equity investments from VCs.
Capital is not only one having the opportunity to sit alongside VCs as an alternative for start-up funding. Others, such as Clearbanc, a Canadian company, have also invested money to develop their non-dilutive financing platform. It launched Clearbanc Runway to help start-ups struggling in the pandemic to secure money.