Prioritizing effective execution without diluting equity ahead of a Series B

casavi is a Munich-based company that aims to make communication and service processes in the real estate environment easier, more efficient, and more customer-friendly. They’ve developed a cloud-based platform that digitizes common property management processes, including ticket management, service provider recruitment, and tenant communication. Today, the platform is used by over 1,200 property management companies, housing associations, and commercial properties.

Like many of the companies we work with at Riverside Acceleration Capital (RAC), casavi recognized early on that their financing options weren’t limited to equity. They saw the benefits of a hybrid approach, mixing debt and equity, to right-size their capital needs, minimize dilution, and prove their go-to-market strategy ahead of a planned equity raise.

Here's how they worked to optimize their growth and upside with the help of RAC’s growth loans.

A focus on execution and sustainable growth

When we were first introduced to the casavi team in 2020, they were a lean and growing startup looking for external capital to help accelerate their growth. Although they had previously raised a Series A, they wanted to delay another equity round until they were able to show capital partners the right metrics to prove their business model and growth potential for expansion. They understood that by waiting another year and concentrating on growing the core business, they would have a more compelling narrative for their equity round.

RAC was able to help them do just that. We provided two tranches of capital over the course of 2021, in the form of non-dilutive growth loans, that enabled the company to invest in sales and marketing without forcing a valuation event before they felt ready.

It’s a use case we see often at RAC – funding the proof points. Many of our portfolio companies choose non-dilutive capital, tailored to their present needs, as they perfect their processes and demonstrate scalability ahead of or between equity rounds. This allows them to pursue that next equity round, if desired, and show potential capital partners that they have a well-defined and proven plan for executing on the high expectations and higher burn rates typically associated with venture capital.

Expansion and a €20M Series B

With the new capital secured, casavi concentrated on refining their strategy. They grew their customer count to around 1,000 property managers and housing companies, accounting for over 1.6M residential units and 70,000 buildings across Germany, Austria, and Switzerland.

A year later, casavi leveraged this growth to help secure a €20M Series B financing round. This round enabled the company to hire an additional 50 employees in 2022 and invest in product and market expansion, with the goal of accelerating growth across Europe.

While the conversation around growth capital has historically focused on equity financing, casavi’s story is becoming increasingly common. Mixing debt and equity financing can help companies meet their evolving needs, maintain a greater share of control, and potentially lower the cost of capital over the long term. There are also benefits for equity capital partners down the road: Non-dilutive capital can increase the size of the pie, while leaving more slices available for future rounds.

"After a successful period of continued growth, we wanted to raise a large growth equity round in the near future - but we needed a little more time to enhance our KPI and execute an optimal process. RAC was the perfect partner to get us to that point: it provided significant funding in a truly non-dilutive way and helped us put together a great B-round.”

- Peter Schindlmeier, CEO of casavi

The above executive was not compensated by Riverside directly for such statement, however the individual has or continues to have an economic relationship with Riverside, including potential incentive awards for performance.

Case study should not be relied upon for investment decision making and should not be considered an offer or solicitation of securities or investment services. For informational purposes only and intended for General Partners or Management teams considering partnering with The Riverside Company. Portfolio company selected based on non-performance criteria.