The TSX Venture Exchanged listed TIMIA Capital Corporation (TSX-V: TCA; OTC Grey Market: TIMCF) has restructured its existing portfolio and formed its first Limited Partnership, TIMIA Capital 1 Limited Partnership (LP), with $7.6 million capital commitments from external investors.
Additional subscription agreements totaling $500,000 have been received and are expected to close shortly for a total LP value of $10.5 million.
TIMIA Capital GP Inc., a wholly owned subsidiary of TIMIA, will act as General Partner.
Existing financing agreements with TIMIA’s portfolio of SaaS companies, representing approximately $8.2 million in value will be transferred into the LP with related monthly payments being distributed, after deduction of fund expenses, to LP unit holders, including TIMIA, on a monthly basis. The remaining $2.3 million will be invested in SaaS companies through TIMIA’s fintech platform and proprietary investment algorithms.
In exchange for transferring the loan facility future cash flows into the LP, TIMIA will receive $5.8 million in cash on its balance sheet, and a $2.4 million interest in the TIMIA Capital 1 Limited Partnership.
photo credit: TIMIA Capital
TIMIA Announces Significant Transaction with $10.5 Million Limited Partnership
~TIMIA Broadens Fintech Platform through non-dilutive capital structure and significantly increases investment capacity~
VANCOUVER, BC – March 11, 2019 – TIMIA Capital Corporation (“TIMIA” or the “Company”) (TSX-V:TCA / OTC: TIMCF) today announced the formation and structure of $10.5 million in TIMIA’s first Limited Partnership (“LP”). External investors will invest $7.6 million in the LP with TIMIA retaining a $2.4 million interest. Additional subscription agreements totaling $500,000 have been received and are expected to close shortly for a total LP value of $10.5 million. The LP, TIMIA Capital 1 Limited Partnership, will be governed under the terms of a limited partnership agreement with TIMIA Capital GP Inc., a wholly owned subsidiary of TIMIA, acting as the LP’s General Partner (“GP”).
Existing financing agreements with TIMIA’s portfolio of SaaS companies, representing approximately $8.2 million in value will be transferred into the LP with related monthly payments being distributed, after deduction of fund expenses, to LP unit holders, including TIMIA, on a monthly basis. The remaining $2.3 million will be invested in SaaS companies through TIMIA’s fintech platform and proprietary investment algorithms. In exchange for transferring the loan facility future cash flows into the LP, TIMIA will receive $5.8 million in cash on its balance sheet, and a $2.4 million interest in the LP.
Transaction Highlights Include:
● Accretive to the Company with no dilution to the shareholders,
● TIMIA Capital will retain at least a 20% interest in the LP, thus still participating in a proportionate share of the revenue from the current investment portfolio while increasing its consolidated cash position to approximately $8.7 million
● Assets under management go from approximately $15 million to approximately $23 million, representing roughly a 55% increase,
● TIMIA will receive a 1.5% servicing fee to manage the LP as its GP,
● TIMIA will receive a performance fee based upon the profit of the LP for the life of the fund, subject to investors achieving their preferred return first
● TIMIA will have approximately $8.7 million of new capital to invest in SaaS companies in North America
“This transaction is a significant milestone for the Company and its shareholders and reflects the confidence of investors in our strategy and ability to source quality investments,” said Mike Walkinshaw, CEO of TIMIA. “Prior to the LP, TIMIA has raised approximately $10 million in total capital and have been able to execute $17 million of transactions. We’ve leveraged our proprietary lending algorithms and related software to efficiently generate deal flow and deliver stronger than industry average returns.”
“According to data collected from pitchbook.com, the market size for loans to North American Software companies generating approximately $1 million to $10 million in revenue represents $14 billon and is growing at over at 25% per year. With this in mind, we felt that this was the right time to raise capital and expand our fintech platform. We’re moving quickly into new geographies and, as a result, expect this capital will be quickly deployed in companies where our capital can speed growth.”
TIMIA is continuously seeking new and exciting investments in the software as a service or SaaS industry. Under TIMIA’s revenue-based financing model, TIMIA advances capital to a SaaS business with a recurring revenue stream that allows the portfolio company to make monthly payments to TIMIA that are a combination of principal and interest with a repayment schedule sculpted to the portfolio company’s revenue streams. The amounts advanced are secured and may be repaid early. The Company expects to make further investments in the coming months, in the pursuit of its business model, which is to earn a combination of monthly payments and periodic gains on investments.
About TIMIA Capital Corporation
TIMIA Capital Corporation is a specialty finance company that provides growth capital to technology companies in exchange for payments based on monthly revenue. This alternative financing option complements both debt and equity financing, while allowing entrepreneurs and existing stakeholders to retain ownership and control of their business. TIMIA’s singular focus is the fast growing, global, business-to-business Software-as-a-Service (or SaaS) segment. We align ourselves with entrepreneurial management teams growing their sales from $1 million to $10 million in Annual Recurring Revenue. For more information about TIMIA Capital Corporation, please visit www.timiacapital.com
For more information, please contact:
Vice President, Capital Markets & Communications
Mike Walkinshaw, CEO
TIMIA Capital Corporation
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