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• Insala is a rapidly growing global HR-tech company 
• In 2023 they needed a capital infusion for growth
• Insala took $350,000 in financing from Efficient Capital Labs
• With this cash, they achieved profitability in the year 2023

Introduction

Insala is a dynamic HR-tech company with a global presence, including in the US, UK, India, Argentina and Mexico. Specializing in SaaS technology solutions, Insala offers programs for mentoring, coaching, career development, alumni management and people data analytics that are designed to be user-friendly and impactful, fostering personal growth and meaningful connections backed up by data.

Insala's reputable client list boasts major corporations, top professional services firms, financial institutions, healthcare and manufacturing companies. The company's expansive reach is evidenced by its service to over 2 million users across 200 countries and in more than 25 languages.

The Challenge of Growth

With its impressive user base and client portfolio, Insala faced a pivotal moment of transformation. After rapid growth, they needed to reach a financial breakeven point. This prompted the exploration of various capital options. 

Strategic Financial Decision

At first, Insala considered traditional routes such as venture capital and private equity, but the terms offered did not align with Insala's valuation.

Insala pivoted to a less conventional form of financing: revenue-based finance (RBF). This approach provided capital against the company's future recurring revenue streams. There were three reasons Insala chose revenue-based finance:

1. Avoid Equity Dilution

Insala considered dilutive options such as venture capital or private equity. At their stage in the growth trajectory, offers asked for significant dilution. This was an expensive option and did not align with Insala’s valuation.

2. Quick turnaround

‍RBF was the fastest option. Insala wanted to begin their turnaround investment immediately to see results fast.

3. Simple balance sheet treatment

‍RBF presented an attractive alternative on the balance sheet, showing up as a current rather than a long-term liability, thus easing investor concerns during scrutiny.

Partnering with Efficient Capital Labs

Among the revenue-based financing providers it considered, Insala selected Efficient Capital Labs. ECL offered competitive rates, prompt funding, and a genuine desire to form a partnership. Insala also considered another financing entity offering higher rates and a minimum funding threshold that was not congruent with their immediate needs.

Financial Infusion and Outcomes

In 2023, Insala accepted a $350,000 funding tranche from Efficient Capital Labs. This strategic capital infusion was a turning point, enabling Insala to not only meet but exceed its breakeven target and achieve a positive EBITDA. CFO Troy Billett reflected on the journey: “because we were able to secure the capital at that strategic time, we were able to surpass our objective of reaching breakeven. For us, it's about how fast can we move and can we leverage capital to do that."

Looking Ahead

With this newfound profitability, Insala is now well-positioned to revisit venture capital and private equity firms for future fundraising with a stronger, more sustainable business model.

Conclusion

Insala's choice to utilize revenue-based finance as a tool for growth represents a case study in strategic financial planning and execution. By choosing a path less trodden and aligning with a like-minded financial partner, Insala has not only achieved its immediate financial goals but also laid a foundation for sustained success and future growth opportunities.

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