The ARR Squared product is designed to support enterprise SaaS and other recurring revenue business models. ARR Squared views subscriptions as valuable assets and offers an instant cash advance against the full annual value of a SaaS subscription for companies. SaaS companies benefit from this form of immediate payment because they don't need to discount revenues to push customers to make prepayments, which eventually impacts valuation.
How did you benefit from participating in Antler's program?
Alexis: Well firstly and most importantly, I would not have met Preet without Antler. Being constantly challenged together through all the bootcamps was a great way to assess our respective working styles and see if there was chemistry. I got to spend a lot of time with Preet and at the end of the day, you want to build a company with someone you "click" with. Preet: The last time I built a company, I was very clear about what I wanted to do. We went and raised capital, and we quickly built the company. The reason I came to Antler was twofold. Firstly, I wanted to find my next opportunity. Secondly, I wanted to find a co-founder. Antler gave me a framework to ideate and exposed me to a bunch of people who had the same goals as me, and helped me find the right person.
Can you share your co-founder story? Was it "love at first sight" or did you have to do a lot of speed-dating and breaking up with founders at Antler?
Preet: Actually, we did the third Bootcamp together at Antler, and from then on, we never changed partners. We brought a few other people into the mix, as generally you are advised to find a technical founder. But what Alexis and I believe is that co-founder fit is more important from a personal and experience perspective versus a pure technical-business fit. I've met a lot of technical people that I would not want to build a company for the next five to seven years with. What I felt with Alexis is that we were in the same place in life - we both had similar life experiences with building and exiting companies. This created a better fit, even if our skill sets maybe not as complimentary.
Tell us about the genesis of ARR Squared. Were you already set on doing something in the FinTech space or did the idea develop during your time at Antler?
Alexis: Before starting at Antler, I was the co-founder and CEO of a marketplace called Luxify.com, which I started from scratch and led for six years before exiting last year. One of the biggest challenges I constantly faced was access to working capital and long-cash conversion. When Preet and I formed a team at Antler, we researched a lot on how we could make access to working capital easier for companies (and SMEs in particular). This research, plus my previous pains as a founder - dealing with access to working capital and cash flow - kind of clicked together perfectly. That's how ARR Squared got started. Then, as we went through the journey of ideation and validation at Antler, we identified SaaS as the "sweet niche" for us. Preet: I primarily come from a finance background in private equity and investing. I was part of the founding team of a company called Bridge Data Centres four years ago, which we merged last year and the company has subsequently gone public on Nasdaq. One of the things that I realized through that process was how hard it is for banks to help finance companies in new and emerging spaces. Prior to that, I was with Blackstone and was responsible for the overall private equity deal origination, analysis, and execution in Southeast Asia. When I first came to Antler, I came with an open mind. But I quickly realized that the finance and FinTech spaces would have the best market-founder fit for me. Alexis and I started talking about improving working capital and financing for companies. We first looked at an invoice exchange and then pivoted to ARR Squared because SaaS companies have a lot of the same characteristics that I had experienced in my last venture. We asked ourselves if we could provide financing against these very high-quality revenues for SaaS companies and create a new asset class around it. That's how ARR Squared was born.
What is the vision behind ARR Squared?
Preet: ARR Squared's broader vision is not just about providing SaaS companies with financing - it's providing all technology companies with high-quality revenues with the financing that they need to grow. If you look at balance sheets around the world with a 30-year view, you'll see that they have transitioned from tangible assets (buildings, equipment, offices, etc) to intangible assets. The largest companies in the world today are not brick and mortar businesses, they are technology companies. But banks have still not evolved to a world where they can finance and support these intangible technology companies. This is the great opportunity in front of ARR Squared. We want to build a company that has a broader vision of focusing on financing technology companies. SaaS is just the first step, but we're building a financial services exchange to connect investors to technology companies through our platform.
How has it been working remotely to grow the company, each in different countries?
Preet: Alexis moved to Australia for personal reasons so, like most companies in the world, we just had to adjust to a new normal. Not having somebody to meet in the office every day is difficult but we've realized it has been really helpful for the company to have him there, as Australia is a much more evolved market from a SaaS perspective. Now we've had to evolve our processes to support company-building remotely and over-communicate with each other. We start each day with a morning call and speak multiple times throughout the day. Fundamentally, this works because it's the right move for the company. Alexis: It turned out Australia was the best market for us to start in, both in terms of size and openness to the product we're providing. It's also a great bridge to the US market because of the nature of the Australian SaaS sector. So it has turned out to be a great opportunity.
What's next for ARR Squared?
Preet: We can definitely see ARR Squared expanding to another set of verticals beyond SaaS and moving forward, we will be able to support anything with subscription models. We're building towards a technology platform that essentially plugs into the existing infrastructure that technology companies have, whether that is their subscription management systems, accounting systems or customer management systems. We actually have real-time information about how companies operate, which allows us to finance them more attractively than banks. Today, all banks look at this information retrospectively. We will look at it in real-time.
Preet and Alexis met at Antler and were part of the fifth Singapore cohort. They started ARR Squared and will pitch at Demo Day in January 2021.