Tractor Ventures have voiced their intention to be a high volume funder in the Australia and New Zealand technology industry, with aims to distribute more than $1 billion in non-dilutive debt funding to companies that look the most like ‘tractors’: reliably operating and sustainably growing tech companies who utilise the additional capital to scale revenue-generating activities.
Having identified funding gaps in the market to address, it’s a financial model that just works across multiple industries, explains Tractor Co-Founder Jodie Imam, off the back of the company announcing new funding products to address very specific (and frequently asked for) scenarios.
“The funding landscape has changed during the time we have been involved in it, and continues to evolve,” mentions Imam, also Tractor Ventures’ CEO.
“And we’re evolving with it, to ensure that there is even more flexibility for companies to access the specific capital they need for a given scenario. We’ve funded well over 180 technology companies across multiple industries and verticals, and we’re not slowing down any time soon.”
Regarding the total addressable market for Tractor to operate in, Imam explains that the one-funding-product-fits-all approach has required tweaking, simply due to the totally different needs expressed by the financial decision-makers, related to time, total access to the capital itself, and looming milestones that require a more strategic approach to accessing capital.
“If you’re a SaaS company, or an ecommerce company, or a hardware company, or operating in a particular niche or vertical like marketing tech for example, you will have a different set of needs for funding based on your revenue,” explains Imam.
“We’ve moved to a scenario-based funding model, based on the most common queries we receive at this point in time. B2B Enterprise SaaS we will always be able to fund in an instant. Other scenarios arise when the financials require a bit more flexible and bespoke assessment.”
“In particular, our Inventory product points to our capability to fund in some very very specific and founder-focussed ways, and that flexibility really excites us, now and for the future.”
Jodie mentions that a large part of the reason that the team can be adaptable in this current economic climate, is the fact that the team have actually walked the walk of the founders they are funding themselves.
“We’re a team of excited founders and experienced operators and investors in the tech ecosystem. We get these founders, we understand their funding needs, and we’ve built the tech in the background to be able to manage funding many thousands of companies for many hundreds of millions of dollars in years to come.”
With Tractor’s entry to the market as a non-dilutive funding alternative to venture capital in late-2020, Tractor started with just one product for founders: a revenue-based funding model that simply acted as a loan paid back as a percentage of revenue.
Created as a means initially to predominantly cater for bootstrapped SaaS companies, what quickly emerged was a much wider addressable market with a need, and a real want, for a non-dilutive option to be able to scale revenue.
The total addressable market, as they say in the biz, began to widen. Dramatically.
“We have an intention of having distributed $1billion of funding over the course of the next few years, via an array of funding products,” says Jodie, who was just announced as the sole women representative in the 2024 Fintech Australia ‘Finnies’ Awards for ‘Outstanding Fintech Leader of the Year.’
“There is a very big market out there for this type of flexible funding, and that market is not centered solely on the ‘startup’ industry. As we access even larger tranches of funding, we anticipate sending some very large amounts of money to companies that understand how to spend $1 to return $5, and keep funding that type of company all year long.”
