Gynger, a platform that lends companies money to buy technology, has raised $20 million in a Series A round led by PayPal Ventures, it told TechCrunch exclusively.
The funding brings the total venture capital raised by the New York-based startup to $31.7 million, with participation from Gradient Ventures (Google's AI-focused venture fund), Velvet Sea Ventures, BAG Ventures, and Deciens Capital.
In addition to the equity offering, Ginger has secured debt facilities under an agreement to receive up to $100 million in funding from Community Investment Management (CIM).
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Gynger works with both buyers and sellers of technology. The company claims to help businesses “finance, pay and manage” all costs associated with technology purchases, including software, hardware, cloud and infrastructure. The company does this by providing businesses with access to unsecured lines of credit, which Ghermezian says allows them to extend financing and preserve cash.
Ginger says it uses advanced artificial intelligence and data analytics to underwrite and approve credit for its customers. Ghermezian said the company automatically detects technology spend and recommends financing opportunities that best fit the needs of both buyers and sellers.
The company claims the application process takes less than 10 minutes, businesses receive loan decisions the next day, “access to funds immediately upon approval,” and offers a variety of payment term options. Gynger pays vendors on behalf of its customers, who then repay it later. Think of it as a “buy now, pay later” service for businesses buying technology.
Meanwhile, Gynger is giving vendors who sell technology a way to offer embedded financing through its accounts receivable platform, which offers “flexible” payment terms, Ghermezian said.
“This gives vendors a highly effective tool to accelerate sales, front-load revenue and accelerate key financial metrics,” Ghermezian added. Vendors are paid annually up front by Ginger, and customers repay Ginger “however they choose.”
Ghermezian pointed to a recent Forrester research report that predicts global technology spending will reach $4.7 trillion by 2024, saying the market is big.
All of this spending is translating into growth for Gynger. Revenue is up more than 700% year over year, according to Ghermezian. However, the growth is coming from a small base, as sales only began in the second quarter of 2023. The company has also grown its customer base five times year over year, according to Ghermezian. He declined to share specific revenue numbers, saying only that the company is on a “clear path to profitability in the near future.” To date, Gynger has processed thousands of payments for hundreds of vendors' customers, including AWS, Google Cloud, Okta, Cisco, Salesforce, HubSpot, Oracle, GitHub, Snowflake and Amplitude.
Like other BNPL companies, the company makes money from shoppers by charging interest on loans and through loan origination fees and interchange fees for its card programs. It also makes money from vendors through service fees and plans to make money from SaaS/platform fees later this year, Ghermezian said.
Image credit: Gynger
During the company's last funding round, Ghermezian told TechCrunch that Gynger competes closely with fintechs such as Pipe and Capchase. Both companies started with funding other than equity or venture debt. Meanwhile, Capchase launched Capchase Pay in May 2023 to move into the buy now, pay later space. But now, Ghermezian said he no longer sees these companies as competitors. There are companies that do some of the things Gynger does. Some, like Tropic, Zip and Vendr, are going the way of SaaS procurement, Ghermezian noted. And there are others, like Brex and Ramp, that offer corporate expense cards that can be used for purchases, including technology. But he sees Bill.com as Gynger's main competitor.
The company now has 25 employees, up from 13 a year ago.
Ginger plans to use the new funding for expansion and financing.
“As we mature, we're seeing our customer base expand from early stage startups to more mature companies, from Series A to pre-IPO,” Ghermezian said. “We're also expanding into other sectors outside of tech, including real estate, retail, healthcare and AI.”
James Loftus, managing partner at PayPal Ventures, believes Ginger's model gives the company a “unique advantage.”
“By embedding payments and funding into both the SaaS buying and selling experience, Gynger believes it can create massive network effects, build deep relationships, and ultimately realize its goal of becoming the next leading AR (accounts receivable)/AP (accounts payable) platform,” he said. “Access to a built-in funding solution that 'works' for both buyers and sellers has not existed at scale until Gynger.”
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