First, What is the Digital Transformation?
The digital transformation is a collective term for industries and organizations (and even non-business sectors and governments and societies themselves) across the world following the trend of changing the way they use digital technologies while also accelerating their impact. It’s a very broad term with vast implications across the globe, but for now, we’re going to focus on a hyper-specific yet still an extremely significant segment of this concept: SaaS in business.
Gone are the days of businesses relying on on-premise platforms to manage information, productivity, communication, and countless other aspects of business operations. Even the cloud itself is becoming an outdated concept, though it remains the foundation of countless SaaS platforms across the world. Now, companies are using SaaS tools to get work done, faster — for multiple reasons.
Companies are replacing those outdated systems and building their own technology stacks by subscribing to more and more SaaS platforms that can easily fit in — and scale up — as needed. These platforms solve multiple business challenges ranging from productivity to customer service. Companies no longer have to worry about maintaining those platforms, updating them, and so on because that burden now belongs to the SaaS provider.
This allows companies to focus more on their core business offering without being distracted by troubleshooting or repair, financially burdened by depreciating or outdated software and equipment, or restricted by the limitations of stagnant and perhaps even unsupported technology. Thanks to the flexibility and relative affordability of SaaS, businesses across the world are moving faster, accomplishing more, and serving their customers better.
But what about the SaaS companies themselves?
Things Are Heating Up
This past year saw a significant increase in the utilization of SaaS platforms by businesses throughout multiple industries. While you may not pay attention to SaaS companies serving industries apart from your own, what’s telling about the increase is in the infrastructure supporting them. Microsoft Azure and Amazon Web Services both saw significant increases in revenue and new customers. People have been paying attention to SaaS for a long time, but as the data shows, the past couple of years have seen a spike in usage.
What this means is that even if you don’t have much competition in your respective space, expect some company sooner rather than later. If you already have some competitors, expect even more. And in both situations, expect to have to push harder than ever to continue winning and retaining customers. More companies are looking for what you have to offer, and if you’re not first in line when they start their search, someone else will be.
How Venture Debt Factors In
Whatever the stage of your SaaS company, venture debt financing can provide a scalable, affordable, and even repeatable source of working capital that you can use to invest in marketing your company in the right channels. If you’ve found a market sweet spot and currently own the market share — invest in owning more of it and keeping it longer. As a lender, we have certain MRR requirements that we must observe, but once you’re there, our funding can fuel your marketing and sales efforts faster and push them further.
Think of it as relationship capital — funding that you can not only use to accelerate your growth but also rely on for numerous other needs rather than funding ongoing operations. At River SaaS Capital, our debt solutions are flexible. Borrow what you need, as you need it, without any equity dilution, restriction, or even warrants. And we’ll be there with you throughout the process, advising you on best practices and supporting your growth along the way.
Ready to put venture debt to work to secure your market position? Fill out the form below — we’d love to learn about your business and how we can help you win the market.