Arc Labs closes credit fund at $32 mln

Arc Labs has raised $32 million for an early-stage credit fund. Based in San Francisco, Arc is focused on providing credit solutions to venture-backed startups. Arc Labs is backed by Bracket Capital.



Arc Labs has announced the close of its first closed-end fund of $32M to provide flexible debt capital to early-stage technology companies. Arc is focused on providing asset-based credit solutions to venture-backed startups that would not traditionally have access to credit products like bank lines and venture debt.

“Our approach is unique because we secure our loans against stable cash-flow streams that are being generated by early-stage companies that have not yet reached profitability,” says Francis Shih, one of Arc Labs’ Managing Partners. “We solve an important pain point for technology startups with capital-intensive business models by providing more funding than could be raised from venture capitalists alone, enabling these companies to scale more rapidly.”

The Arc team has closed over 15 debt facilities with 10 software companies across the globe and is now actively investing in the United States, Asia and Latin America. The firm has a target commitment size of $5M to provide startups with their first institutional credit facility.

The firm has recently closed a $20 million debt financing deal with PayJoy, a software-driven platform for providing credit access in emerging markets via smartphone financing. Arc Labs recognizes the unique needs of capital-intensive technology business models like online lending, and aims to provide the capital these businesses need to rapidly scale. “We found a true partner in Arc Labs, who shares our mission in providing financial access for the underbanked, and offers best-in-class credit solutions for emerging startups.” says Linda Chew, PayJoy’s Head of Finance.

We are thrilled to partner with PayJoy in its mission to make smartphones affordable worldwide,” said James Sagan, Arc Labs Managing Partner. “PayJoy’s unique technology enables people who lack credit to purchase their first smartphone and we’re proud to power the company’s expansion.”
Arc Labs works with founders to build their businesses from the ground up and provides hands-on operational support in credit structuring, underwriting, loan servicing and back-office.

About Arc Labs
Arc Labs is an early-stage credit fund based in San Francisco focused on providing creative debt capital to innovative technology-enabled startups. Arc Labs invests in North America, Latin America and Asia. Arc Labs is backed by Bracket Capital, a global multi-asset investment manager.