Gynger Secures $20 Million in Series A Funding for Tech Capital

Gynger, a platform that provides capital to companies for technology purchases, has raised $20 million in a Series A funding round led by PayPal Ventures. This brings the New York-based startup's total venture capital raised to $31.7 million.

• The funding round also included participation from Gradient Ventures (Google's AI-focused venture fund), Velvet Sea Ventures, BAG Ventures and Deciens Capital.
• In addition to the equity raise, Gynger has secured a debt facility from CIM (Community Investment Management) with an agreement to fund up to $100 million.

Gynger's Solution: Bridging the Gap in Technology Financing

Gynger was incubated in June 2021 out of m]x[v Capital, an early-stage venture fund founded by Mark Ghermezian. Ghermezian, who previously founded Braze, a cloud-based customer engagement platform, recognized the difficulty companies face in both selling and purchasing software. He saw an opportunity to streamline the process and provide a more accessible financing solution for both buyers and sellers of technology.

• Gynger offers unsecured lines of credit to companies, allowing them to extend their runway and preserve cash.
• Gynger utilizes artificial intelligence and data analytics to assess creditworthiness and automatically detect technology spend, recommending financing options tailored to individual needs.

Gynger's "Buy Now, Pay Later" for Technology

Gynger's platform acts as a "buy now, pay later" service specifically designed for technology purchases. Companies can secure financing for a variety of tech-related expenses, including software, hardware, cloud services, and infrastructure.

• The application process is streamlined, taking less than 10 minutes. Companies receive credit decisions within a day and access to funds immediately upon approval.
• Gynger pays the vendor on behalf of the customer, with the customer paying Gynger back over time.

Gynger's Impact on Tech Vendors

Gynger also empowers technology vendors by offering them an embedded financing option through an accounts receivable platform. This platform provides vendors with "flexible" payment terms, helping them accelerate sales and pull revenue forward.

• Vendors receive upfront payment from Gynger, while the customer repays Gynger according to their preferred schedule.
• This embedded financing solution can significantly improve key financial metrics for vendors.

Gynger's Growth and Market Opportunity

Ghermezian highlights the vast potential of Gynger's market, citing a recent Forrester research report that projects global tech spending to reach $4.7 trillion in 2024.

• Gynger has experienced rapid growth since its launch, with revenue increasing over 700% year-over-year and its customer base expanding 5x year-over-year.
• The company is on a clear path to profitability and has facilitated thousands of payments across hundreds of vendors, including AWS, Google Cloud, Okta, Cisco, Salesforce, HubSpot, Oracle, GitHub, Snowflake and Amplitude.

Gynger's Revenue Model and Future Plans

Gynger generates revenue through various sources, including:

• Interest on loans
• Loan origination fees from buyers
• Interchange fees from its card program
• Service fees from vendors
• SaaS/platform fees (planned for later this year)

Gynger's Competition and Future Focus

Gynger initially competed with fintechs like Pipe and Capchase, both of which provided businesses with funding outside of equity and venture debt. While Capchase has expanded into the buy now, pay later space, Ghermezian sees Bill.com as Gynger's primary competitor.

• Gynger differentiates itself by offering a comprehensive platform that caters to both buyers and sellers of technology, providing embedded financing solutions for both parties.
• Gynger will use its new capital to scale operations, fund loans, and expand into new verticals outside of technology, such as real estate, retail, healthcare, and AI.

PayPal Ventures' Investment in Gynger

PayPal Ventures, the lead investor in Gynger's Series A funding round, believes in the platform's unique potential to transform the technology financing landscape.

• James Loftus, Managing Partner of PayPal Ventures, highlights Gynger's ability to drive network effects and create deep relationships between buyers and sellers through embedded payments and financing.
• Loftus believes that Gynger's model has the potential to become the next major accounts receivable (AR)/accounts payable (AP) platform, creating a win-win for both tech companies and their customers.