Grow your software business. Without giving up a piece of it.
Revenue-based financing is a funding model built around one simple idea: your repayments move with your revenue. When your business has a strong month, you repay more. When things slow down, repayments shrink accordingly. There is no fixed interest rate running on its own clock and no repayment schedule written before your revenue comes in.
The schedule follows what your business actually does. Not what a model predicted it would do when the deal was signed.
How repayments actually work
When Round2 Capital finances a company, repayments are structured as a fixed percentage of monthly revenue, typically around 2-7% of ARR. The total amount repaid is capped, usually between 1.4x and 2x the original funding amount.
There is no interest compounding in the background. There is no covenant to breach. If your revenue dips for a quarter, your repayments dip with it. If you have six strong months, you reach the repayment cap faster and the financing is done.
Why this works best with recurring revenue
Revenue-based financing is not a universal funding tool. It works specifically because recurring software revenue is predictable enough to underwrite against. Monthly subscription revenues behave consistently. Project closures, one-off implementations, and services contracts do not.
This is why Round2 Capital works preferred with high recurring revenue software businesses. It is not a preference. It is what makes the model function at all. A business with high services revenue might look strong on paper and still not fit, because the repayment model requires revenue predictability that services revenue cannot provide.
RBF vs equity vs bank debt
Who this is built for
Revenue-based financing is not the right fit for every B2B software company. Round2 Capital works with businesses that meet a specific profile:
- B2B software company
- At least EUR 3m in annual recurring revenue
- A demonstrated track record of sustained revenue growth
- Strong cash conversion —the business should be capable of reaching break-even without the capital
- Expansion of the business by acquisition
- Technology at the core of the product, not as a supporting layer
The last point matters more than it sounds. We are not looking for businesses that happen to use software. We are looking for businesses where the software is the business.
Frequently asked questions
Is revenue-based financing the same as a loan?
Not exactly. A loan comes with a fixed repayment schedule and typically an interest rate. RBF repayments are a percentage of revenue, so the schedule is determined by how the business performs rather than by a predetermined calendar.
Can I repay early?
Yes. Round2 Capital financing can be repaid early without penalty. If your revenue grows faster than expected, you reach the repayment cap sooner and the financing ends.
Do I need to give up equity?
No. Revenue-based financing from Round2 Capital is non-dilutive. You keep full ownership of your company.
What if I’m not sure whether I qualify?
Ask us. We assess every business on its own terms and will give you a direct answer. We pass on more deals than we close, and we would rather tell you that early than waste your time.
