Provider of a SaaS based system that assists K-12 educators and administrators in managing, overseeing and enhancing their students’ engagement in digital learning environments.
The Financing Situation:
Due to the cyclical nature of education-based budgeting and spending in school districts, cash flow in the EdTech space is highly seasonal. Contracts are paid on an annual basis with the vast majority coming in during one quarter of the year. This leads to temporary cash shortfalls which were historically financed primarily through equity from investors. Knowing the company was very close to attaining “escape velocity” and not wanting to further dilute equity, they sought out venture debt as an alternative financing option.
Led by a strong management team, demonstrating solid revenue growth since inception, and having already completed a cost restructuring during 2017, Super G recognized the company was poised for profitability and overall success with the help of some working capital cushion in the near term. Super G was able to work quickly to complete diligence and documentation in order to fund a $1.25MM loan within three weeks and solve the company’s seasonal cash shortfall.