Levenue is a 2-sided trading platform where EU-based companies can instantly trade their monthly recurring revenue streams to upfront cash. Investors from all around the world can bid on these revenue streams and earn yield as an alternative short-term fixed income product. Investors can do it on a trade-by-trade basis or on an investment strategy basis. In the second case, investors allocate a given amount of funds to trades on the platform and chose the risk profile of the companies to finance based on (max. net growth, min. runway, min. MRR, risk exposure) of the companies they want to trade with. They give Levenue an Individual Mandate to execute the trade within the set limits.
Who can be an investor on Levenue platform?
Qualified Investors are eligible to invest through Levenue. According to EU law, you fall under this category if you are a regulated entity or a large enterprise. If you have a significant experience and knowledge about you can also apply and we will check if you satisfy the special legal criteria. You will be informed about the decision in less than 24 hours after having run through the onboarding process. Levenue also opened its platform for individual investors/angels with the possibility to co-invest in deals. Levenue allows and helps angels to group together and co-invest in deals. By pooling resources, angels can share both risk and return.
How should I calculate the Risk with the Assets I acquire through Levenue?
Levenue can not provide you with a fixed way of assessing the risk of investments made through Levenue. It’s every Investor’s own duty to analyze the risk of these investments within the scope of internal risk analysis. Those investments are short-term fixed income, and underwritten by recurring revenues double the size of the transaction.
What kind of agreement is created between counterparties transacting through Levenue?
Depending on where the recurring revenue (XAAS) company and the Investor are located, the transaction/trade between them will take the form of a short-term loan or a sale of receivables. We have built a unique Legal Rule engine, ensuring that legal requirements for each specific trade are analyzed according to the jurisdictions of the parties. Based on that, the right contract is automatically generated.
Role of Levenue
What’s the role Levenue plays in the transaction between myself and the Recurring Revenue Companies?
As an intermediary Levenue has different roles, on both sides of the market - between XAAS companies and Investors. In the first place, it rates the revenue streams as an asset, by analyzing the data behind them. The platform collects data by making connections with data sources of the Recurring Revenue companies on the one hand, treats that data in a very straightforward way, and reports on the result of that analysis. Only qualifying sell-side companies will be traded on the platform, which provides comfort to the buy-side parties. Secondly, Levenue makes sure all financial flows are underwritten by the right contracts, and fully compliant with different EU and local legislation. Once transactions are signed between both counterparties, the Levenue system also helps with the administrational handling of that transaction, providing a gateway of standardized information sharing. Finally, Levenue will make approved companies and investors strategy match to start the trading deal. The investments are run automatically through Levenue and investors receive monthly payments.
Process of investing
Can I select which companies I want to invest in?
After Levenue has identified your investment strategy and depending on your desired investment method, it will either automatically match you with companies that fit your investment strategy, or you will see companies on a per-deal basis. Investors can bid by entering the required discount rates they want to offer for the funding contract. Levenue connects with subscription managers, accountancy systems, and banking data of recurring revenue companies. Thanks to our live data connections, we have continuous insight on their current company metrics. We use these to measure cash-flow, runway, growth, strengths & weaknesses, evolution of subscriptions, and much more. As an Investor, you get access to the data analysis of each prospective company that falls within your investment scope (legally and risk-wise).
What’s an Investment Strategy on Levenue?
Thanks to our proprietary Investment Strategies, Investors on the platform can allocate certain amounts of capital within certain categories of Recurring Revenue companies. Filling in the parameters of the type of recurring revenue companies they want to trade with, Levenue basically gets a Power of Attorney to execute certain trades that lay within the boundaries you set. This automates the process of building a broader portfolio of contracts.
What kind of communication and reporting can I expect?
You will be alerted every time a company is relevant to your defined strategy. During your investment, you can track the performance of your investment through our platform (outstanding revenues to receive, subscriptions, details of the investment, changes in the risk profile, … ). Companies connect their data sources which Levenue uses to determine the trading limit a company gets on the platform. Levenue crosses reference 3 “sources of truth” (bank, subscription, and accounting data) to measure the health and growth of companies.
Private investors / Business angels
How can I invest through Levenue as an individual investors/ business angel?
As a private investor, you can diversify your existing investment portfolio by investing on the Levenue marketplace. Just like other institutional investors, our platform allows you to invest alongside other investors according to your predetermined investment strategies. You just have to define your investment strategies and we will group you together with some other angels to co-invest in deals. The only difference between Institutional investors and private individuals is that your investments will be pooled with resources of other angels into SPVs in order to enable the trades to be legal under EU law and enable you to share both risk and reward with peers.
What’s the average return I could get from my investment?
Returns on Levenue are depended on the discounts investors use to bid on individual contracts or on the more general strategies. This means every investor controls their own returns. Just like every other marketplace, Levenue does provide you with a view of the most recent other closed deals and their discount prices directly by signing up on the platform.
How is it different from equity or debt?
Compared to equity, revenue-based financing on Levenue’s marketplace is a non-dilutive funding addressed to recurring-revenues businesses. Levenue allows to buy future cash flows of subscriptions of high-growth companies at a discount and does not require personal guarantees from founders since Levenue uses the customer subscriptions as the underlying asset. It is a process that is much easier and quicker than debt or equity financing. Only based on data and performance. And financing in several days only.
What’s the difference with other RBF players?
Levenue is two-sided platform where recurring-revenue companies trade their predictable revenue for upfront cash with vetted financial investors. Levenue provides the tools to underwrite the financing by performing a risk-assessment based on a variety of variables. This results in a fixed ‘discount-rate’ (the discount on the annualized MRR a SaaS company needs to give to the investor). Levenue is the only company in Europe able to provide that platform right now. Other revenue-based financing players in Europe focused on the “on balance” model, meaning they underwrite all financing on their own balance sheet, and thus have to manage risk on their own books. Levenue is the only marketplace to be able to comply with European regulation. Also, Levenue is the only one to open revenue-based financing to private investors.