Capital, a leading innovator in the emerging category of “capital as a service” (CAAS), announced today that it has closed on an additional $9M in seed funding led by Jerry Yang’s AME Cloud Ventures with participation from Steve Jurvetson’s Future Ventures, Greycroft, Wavemaker Partners, Partech, and renowned angel investors including Rentech and First Round Capital’s, Howard Morgan and Stuart Roden, the former Chairman of Lansdowne Partners.
With over $14M in seed funding and $100M in balance sheet raised to date, Capital will use the new funds to further develop its AI-based The Capital Machine and expand its efforts to empower companies to better understand their current capital stacks and make optimal fundraising decisions.
“We founded Capital because we wanted to solve a massive problem in the fundraising process, which my own portfolio founders faced when I was a venture capitalist at Draper Fisher Jurvetson,” said Blair Silverberg, CEO of Capital. “The traditional fundraising process takes too long, is opaque to founders and early owners, and can be subject to biases. We believe that Capital offers a better way forward, with a fairer, faster, and more transparent private market process for accessing capital based on AI and direct business data.”
“Capital is doing something that is unprecedented in the private capital world,” said Nick Adams of AME Cloud Ventures. “Until now gaining access to large, sophisticated private financing has been a very manual and antiquated process. With the use of AI, classification algorithms and machine learning techniques Capital can help founders understand their true cost of capital and avoid suffering excessive dilution in order to scale.”
Capital is at the center of several key trends in fintech and machine learning. Several fintech platforms in recent years have been offering online lending to SMBs, with many of the companies struggling in the aftermath of the COVID-19 crisis. Capital is offering a tech-first approach to institutional capital raising for the first time, making the fundraising process faster and more transparent for sophisticated companies with more than $5M of revenue, whether venture-backed or bootstrapped.
Steve Jurvetson, the founder of Future Ventures, added, “when I started in the venture industry in the mid-1990s, it was small, with $7B invested in 1995. Today $140B is invested each year in the United States with a similar amount in China. The industry has grown and matured, but its capital structure has not. Equity is appropriate for research and development – say, inventing a new rocket – it is not optimal for scaling sales and marketing or a myriad of other types of investment that are predictable and financed non-dilutively in other industries. The transparency created by The Capital Machine can move our industry forward and remove bias from the system as well.