Due to the pandemic and the general slowdown in technology, the software-as-a-service (SaaS) sector is experiencing budgetary restrictions and staff reductions. In order to keep cash on hand and grow more productively, businesses have tightened their SaaS budgets.
Vartana was established as a result by Kush Kella and Ahmed Sharif (which my colleague Mary covered recently). Kella and Sharif claim that while they were coworkers at the fleet management company Motive, they dealt with the discomforts and issues brought on by faulty SaaS contract management and restrictive payment infrastructure. After years of observing deals fail because of insufficient payment flexibility, they left Motive to found Vartana with the goal of providing businesses with a managed platform that aids sales representatives in closing deals.
Kella stated that “Vartana is a win-win for sellers and buyers of SaaS services and hardware products.” “It gives vendors new tools to close contracts and generate cash with prepaid deals while offering buyers various payment options and a simplified purchasing experience, ensuring buyers can buy the best technology available to grow their businesses,” the statement continued.
In a Series A round led by Mayfield and including Xerox Ventures, Flex Capital, and Audacious Ventures, Vartana announced today that it had raised an additional $12 million, bringing its total funding to $19 million. i80 Group provided Vartana with a $50 million line of credit, which, according to Kella, will guarantee that financed deals can be managed through Vartana’s new capital marketplace.
According to Kella, “Vartana no longer records buyer debt in their books with the launch of the Vartana’s capital marketplace, ensuring a balance sheet-light business.” “Lean, efficient growth is our main priority. We’ve had great success in the SaaS sector, so we’re intensifying our efforts.
Kella refers to Vartana’s platform as a “sales closing” platform, and it is made to be used by vendors of hardware, software, and hardware combined with SaaS. With the acceptance of a variety of different payment options (such as pay in full, deferred payment, and installment plans), Vartana assists in managing tasks like contract tracking, payment terms, and signature capture. Multiple quotes can be sent at once, giving buyers the freedom to choose the payment method that works best for them. The buyer can electronically sign the contract from a web or mobile device after choosing a payment method to complete the transaction.
On the side of the capital market, algorithms created by Vartana normalize data, grade each buyer, and extend debt financing offers. Buyers can request funds and receive quotes in real time from a network of banks and lenders thanks to the platform, which matches loan requests to buyers.
“Sellers get paid on day one when deals are financed, whether traditionally through a bank or via the Vartana platform,” Kella said. “Buyers don’t have to pay upfront, meaning they get to keep cash in their bank account and pay a monthly fee, ensuring they stay nimble and can invest cash in the areas of their business that need it most. New non-dilutive cash flow is acquired for the entirety of a deal, sometimes up to five years of future cash, and buyers don’t have to pay.”
According to Kella, startups like Ratio, Cashflow, and Gynger as well as “dozens” of sales departments at firms like Verkada, Samsara, and Motive as well as over 10,000 buyers compete with Vartana. Ratio has recently had a lot of success, bringing in $411 million in equity and credit in September. However, he does not see them as direct rivals, pointing out that Vartana’s business strategy relies on providing financing to buyers and concentrating on late-stage tech firms.
Regarding this, Vartana just released a closing platform that gives sales representatives the ability to “market” financing and deferred payments to any buyer. In a world where cash is king and businesses are looking for ways to keep cash on hand, this is especially crucial, according to Kella. “Offering self-serve financing as a choice to all buyers helps buyers maintain control over their cash and pay for products over time, while sellers receive the full contract value from day one.”
Regarding Vartana’s income, Kella remained silent. But he claimed that despite a 4x increase in the company’s headcount, financing volume increased by 600% year over year. By the end of 2023, the workforce is expected to have grown from 40 employees to 85.
In addition, Patrick Sayler, a Mayfield partner and investor in Vartana, stated via email that “time kills all deals in business-to-business enterprise software. This is particularly true during the deal closing process, where there is an alarming amount of offline communication between the vendor, buyer, and financing teams that drags out over weeks and forces deals to either move to the following quarter or fall through altogether. With a fully digital checkout platform that integrates proposals, signatures, payments, and self-service financing, Vartana’s business-to-business enterprise sales closing and financing platform puts an end to this. This improves conversion, sales cycles, order values, and cash flow management—all of which are crucial in the current economy.