Data startup Fivetran availed a $125M delayed-draw term loan facility from Vista Credit Partners. Fivetran's co-founder and CEO, George Fraser, never previously considered taking debt. However, the firm chose debt due to the prevailing market conditions, as neither equity fundraising nor IPO listing was an option. Fraser said, "Who knows what the right multiples are in this market?" - Fivetran was most recently valued at $5.6B.
- The new financing arrangement is structured in such a way that it delivers Fivetran cash in stages at predetermined time intervals.
- Fraser referred to the loan as an insurance policy to avoid being driven "into a corner" the next year or the year after.
- When the market conditions improve, Fivetran will consider a possible IPO listing.
- The fallout of prominent venture debt lender, Silicon Valley Bank, has made it even more difficult for startups to secure loans.
- However, financiers are still providing debt to late-stage companies with strong metrics.
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