As featured on LinkedIn.
A consumer can buy anything from a couch or an exercise bike, to a sweater or an iPhone, on installment. Using services like Affirm (a GGV portfolio company), Klarna, Afterpay, or other embedded buy-now-pay-later (BNPL) options, consumers can easily choose convenient and affordable payment terms at checkout. But businesses have little access to BNPL when it comes to paying for mission-critical SaaS software. They either have to pay upfront annually to get the most favorable rate, or, in some cases, can opt for a higher month-to-month price. And that’s a problem not just for business buyers, but for SaaS software providers, which are stuck between wanting to offer their customers favorable monthly payment plans and needing to collect annual payments to generate cash flow and show strong SaaS metrics. This situation has led us to a world where you can buy a $60,000 Tesla in five minutes, but it takes weeks or even months to negotiate a $60,000 annual software contract.
That’s why GGV is excited to announce our seed investment in Cacheflow, an innovative woman-led company co-founded by Sarika Garg and Brian Zotter, both 20-year enterprise software veterans who have worked on both the provision and procurement sides of the SaaS billing conundrum. Cacheflow is a software company providing fintech rails for SaaS companies that allow them to offer customers embedded financing at the point of sale. Buyers essentially borrow a lump sum and pay it off monthly at zero or very low interest, just like BNPL in the consumer space, while SaaS sellers collect annual upfront payments. It’s one of those ideas that seems so evident after you hear about it that you wonder why no one thought of it previously. Thankfully, Sarika and Brian have the vision, operational knowledge, and team-building expertise to bring this innovative idea to fruition, and we’re thrilled to be an early investor in Cacheflow.
So why does the world need Cacheflow? As we mentioned above, consumers currently have access to a host of flexible payment options when making purchases, but SaaS software customers do not. Cacheflow’s embedded BNPL fintech solution sits at the point of sale and helps software account executives close more business by offering affordable monthly payment to customers, while getting paid upfront. We believe Cacheflow has the potential to impact the way software is bought and sold across the global enterprise SaaS market, which is set to reach $400 billion in annual sales worldwide by 2025. As Cacheflow grows its customer base, it will also be able to collect valuable data on SaaS usage, billing, renewals, and churn, creating a database of valuable insights that its partners and customers can use to inform risk assessments and parameters.
Sarika and Brian are the right founders to bring this point-of-sale SaaS financing vision to life. Sarika has deep expertise in procurement software in particular, and SaaS software sales in general. We first met Sarika a few years ago when she was chief strategy officer at procurement financing unicorn Tradeshift, where she helped build an invoice factoring business for suppliers and an AP automation platform for buyers. She spent the previous 13 years working at SAP, most recently running SAP Ariba, where she drove over $200M in sell-side revenue for Ariba cloud. Brain has technical and founder chops. He is a three-time software company founder who has also held VP of engineering roles at Medium and Salesforce.
Cacheflow is still in its early stages, but the company has built a powerful suite of embedded fintech APIs that integrate with Salesforce and is quickly forging relationships with lenders on the backend. Cacheflow is helping SaaS companies close more deals faster by providing customers with flexible payment choices at the point of sale. And they are helping small to mid-size companies sign deals for mission-critical software faster, getting access to the discounts their larger competitors already enjoy by using external lender financing to pay for annual software contracts. We would say that’s a classic win-win and we can’t wait to accompany Sarika and Brian on the next leg of their company-building journey.