In the make-or-break world of startups and scale-ups, one thing is clear: accessing the right capital at the right moment can significantly impact a company’s trajectory. Growth debt, a type of private credit financing that allows companies to accelerate their growth without diluting equity, has become a key lever in enabling tech companies to scale while maintaining ownership.
Our portfolio encompasses a diverse range of sectors—from Fintech to HealthTech and beyond. Their journeys provide valuable insights into how growth debt can be a game-changer when strategically deployed.
As demonstrated by recent company milestones and news events profiled below, we see the tangible impacts of growth debt (and subsequent capital raises) in unlocking market expansion, fueling product development, and providing the funding that helps unlock exits through M&A.
1. Fueling Global Expansion
One of the most evident trends across our portfolio is how companies use growth debt to power international growth and expand their market footprint.
- Futurerent, a property fintech company, secured $50M to roll out its business in the U.S., allowing it to seize opportunities in one of the most competitive real estate markets to help Americans purchase real estate by financing their down payments into affordable, manageable payments.
- Huspy, a leading UAE Proptech company simplifying the home financing process, secured new funding to build a SuperApp for real estate. Already facilitating over 25% of all residential mortgages in Dubai, the company is looking to scale its services across MENA and Europe.
- Splend, which provides vehicle subscription services in Australia and the UK, saw growth debt help fund its EV shift, backed with another $20 million. This funding enables it to expand into the green vehicle space, a rapidly growing market.
2. Accelerating Product Development
A key takeaway is the ability of growth debt to unlock innovation, particularly in sectors where R&D and product development are essential for maintaining competitive advantage. Technology companies face constant pressure to innovate, and accessing capital for product development is often the deciding factor between becoming a market leader or falling behind.
- Kredivo, a leader in Southeast Asia’s fintech space launched the Krom digital banking app, enabling the young generation to achieve their financial independence.
- Tabby, a buy-now-pay-later app, used capital to expand its service offering, catering to a growing base of customers using installment payments for essential purchases.
- Taxfyle, a tax preparation platform, used growth capital to launch a suite of AI-powered tools that reduced the cost of tax preparation by 40%.
- TechLend (Bridgit), an online mortgage loan platform, raised a $125 million debt facility to support an additional $500 million annually in residential property financing. Combined with a new 12-month loan term product that allows borrowers higher loans and faster approvals, Bridgit’s broker network is helping more Australians buy their next property before selling their existing home.
3. Driving Go-to-Market Partnerships
New capital resources are being deployed to fund investment in sales, marketing, and product integration efforts, focused on securing and building commercial partnerships that reach new customers and complement existing value propositions.
- ROLLER, a global provider of venue management software for the attractions industry, formed a new integration with Workforce.com, an industry-leading payroll, scheduling, HR, and workforce management software, revolutionizing how venues manage staffing needs, ensuring optimal operational efficiency and profitability.
- UpScript Health partnered with Axena Health to introduce new telehealth services for women, using capital to quickly expand its offerings in the rapidly growing direct-to-consumer healthcare space.
- Engrain Technology, known for its touchscreen kiosks and interactive mapping products, expanded its capabilities by integrating with AppWork, demonstrating the value of growth debt in enhancing product offerings and partnerships.
- HungryHungry and MOBI merged to serve global markets, enabling them to expand their influence in the online ordering and hospitality sectors.
- Rezdy, an online booking and distribution platform, used capital to join forces with Trip.com Group and offer new travel experiences, positioning itself as a leader in travel tech.
- Damstra Technology, a workforce management solutions provider, is now fulfilling its global growth ambition, as part of Ideagen, following their recent acquisition of the business.
Conclusion: Growth Debt as a Key to Unlocking Value at Critical Stages
The lessons learned from recent portfolio company outcomes demonstrate that growth debt is far more than just an alternative to traditional financing—it’s a strategic tool that, when used effectively, can unlock significant value at critical stages in a company’s journey. Whether enabling global expansion, accelerating product development, or accelerating acquisition opportunities, growth debt provides the capital flexibility necessary to thrive in today’s global market.
—
The content presented are selected by PFG based on current events and themes that PFG believes are of interest to its audience. PFG is not directly or indirectly endorsing any particular transaction, company or news event. Readers should come to their own conclusions. More information regarding PFG’s historical or current investments with such companies is available upon request.
