Tech companies with recurring revenue that want to avoid venture capital and the dilution of ownership it brings, have had a growing amount of choices in the past few years.
Miami-based Pipe—one of the platforms that lends based on a company’s annual recurring revenue and was valued at $2 billion after its $250 million strategic equity investment in May—is now looking to bring that business model to the entertainment world.
On Wednesday, the company announced it acquired London-based Purely Capital, a media and entertainment financing company, and is launching its own media and entertainment division.
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The idea behind the new division is to help producers, rights owners and others in the industry get more up front revenue from long-term licensing contracts with the big streaming services like Amazon, Netflix and Disney. The advanced revenue will help production companies with the ability to invest in developing or acquiring new content—especially with demand for more new content on these services at an all-time high.
According to the release, Purely had originated the purchases of more than 250 titles from customers before the deal, accounting for more than $45 million in revenue.
The deal also illustrates Pipe’s growth. Like similar platforms, Pipe started by helping mainly SaaS companies get financing—such companies have a subscription model with some amount of guaranteed revenue. Through the past year or so, it has expanded its offerings to more types of companies that have recurring revenue.
Now it has expanded to Hollywood.
Illustration: Dom Guzman
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Author: Chris Metinko