Efficient Capital Labs, which provides non-dilutive capital to B2B SaaS companies operating in the South Asia-U.S. corridor has raised $7 million pre-Series A raise led by QED Investors with participation from existing investors including 645 Ventures, The Fund, Lorimer Ventures, Riverside Ventures and Generalist coming in as a new investor alongside QED. This was ECL’s second raise in less than a year. 

The company offers B2B SaaS companies a percentage of their annual recurring revenue (ARR) as upfront capital which is completely non-dilutive in nature. ECL funds through its balance sheet, which means that customers get access to capital at a much cheaper cost and don’t have to face the uncertainty that comes with depending on third-party investors or marketplace dynamics to receive capital against revenue, the company said. 

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The latest round of funding led by QED Investors brings the total amount of capital raised by ECL to $110.5 million, which includes a $100 million debt facility. This new round follows the equity raise in April last year of $3.5 million, led by 645 Ventures.  

ECL said it will use this fresh round of capital to invest in greater automation, expand its team across engineering, product, underwriting, sales and operations and achieve better unit economics. 

ECL was co-founded in 2022 by Kaustav Das and Manish Arora. Before founding the business, Das spent more than 20 years in the industry as chief risk officer at multiple organizations, including Kabbage (now a part of American Express), in both commercial and consumer finance sectors. On the other hand, Arora worked as a senior leader in B2B SaaS, fintech and regulatory technology spaces, most recently as the general manager, South Asia for PayJoy, a San Francisco-headquartered B2B SaaS fintech. 

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“Our vision is to enable border-agnostic access to capital for businesses in emerging markets, such as India, that can benefit from lower capital costs that are available in markets such as the U.S.,” Das said in a statement.

Since starting its lending operations in June 2022, ECL said it has provided funding to more than 50 SaaS businesses, and the business is poised to grow to a total of more than 150 customers before the end of 2023.