Ryte, a Munich-based leader in website user experience, provides comprehensive software solutions for monitoring, analyzing, and optimizing websites. Their SaaS platform excels in key areas such as SEO, quality assurance, web performance, accessibility, compliance, and sustainability. With a global presence including offices in Germany and Vietnam, Ryte serves over 700 clients, including prominent names like Daimler, Hilti, and Boehringer Ingelheim. In 2024, Ryte was acquired by Semrush, a US-based company.
Flexible financing that adapts to a company’s development
Following a successful Series A in 2021, Ryte initiated a dual-track process in 2023, targeting either an exit or the next financing round.
"We considered two key scenarios: securing bridge financing for a smooth exit or the upcoming VC funding round. Both scenarios were predicated on our growth trajectory and the path to break even – and we wanted to fund this through debt capital," recalls CFO and COO Jens Mittnacht.
Finding a financing instrument fitting your needs
Ryte sought flexible financing that could adapt to both scenarios. That’s why the company explored alternative financing solutions, starting with venture debt.
For Jens, venture debt presented several challenges:
- Ryte was reluctant to commit to long-term debt capital at that time.
- The venture debt contracts were complex and time-consuming, particularly due to the need to coordinate with multiple investors.
- Venture debt included warrants, allowing the provider to convert debt into company shares – something that some existing investors were opposed to.
Ryte began exploring alternatives and discovered re:cap through its network. "We found re:cap’s solution much simpler and more flexible. The 12-month term was also a perfect fit for us, and there are no warrants involved," Jens explains, highlighting the key advantages back then.
Debt capital that allows Ryte to react flexibly to new business conditions
Ryte secured €1.5 million in funding from re:cap, with a 12-month term. This capital was intended as bridge financing, guiding Ryte toward profitability and setting the stage for either a successful exit or stand-alone financing.
"At that time, we significantly cut our operating costs and reduced our burn rate," Jens explains. "However, it became clear that achieving either an exit or stand-alone profitability would require more time. Consequently, we pursued long-term financing to support our extended strategy."
re:cap switches from short-term to long-term financing
Ryte's updated plans coincided with the launch of re:cap's new long-term financing product in partnership with HSBC. This offering provides companies with financing terms of up to 60 months, including periods with no repayment obligations.
"The long-term financing product has been a game changer for us, providing stability and enabling us to plan effectively for the next four years. We were already acquainted with the processes, which have continually evolved and improved. Additionally, re:cap offered us market-competitive terms, akin to those we received with venture debt," says Jens.
To secure long-term financing, re:cap collaborated with Jens and his team to craft a comprehensive funding plan totaling €2 million. This plan, aligned with Ryte’s business strategy, ensures that they get capital precisely when needed, enhancing financial stability and planning security. As a result, Ryte not only achieved break-even but also experienced profitable growth.
However, the situation changed once again.
At the end of 2023, Semrush approached Ryte. Semrush is a prominent player in the global SEO industry. With over 115,000 clients and an annual recurring revenue exceeding $370 million, Semrush stands out as a leading global partner for Ryte.
re:cap financing provides a better negotiating position for exit
This has brought the topic of an exit back into focus.
“On one hand, it highlights the challenges of planning for milestones like exits. On the other hand, the financing from re:cap has provided us with the flexibility needed to navigate these challenges,” says Jens.
Thanks to the long-term financing from re:cap, Ryte was well-positioned to forgo an exit and focus on profitable growth. This financial stability gave the SaaS company a stronger negotiating position with Semrush. As a result, they approached the discussions with confidence, knowing they were not under pressure and were fully financed. This leverage naturally shaped the outcome of the exit talks.
The exit took place in mid-2024. "We couldn't have achieved this successful exit without re:cap," says Jens. "Our existing investors, led by Octopus Ventures, also played a decisive role and provided exceptional support throughout the process."
