Actionfigure Secures Capital That Truly Supports Growth
TIMIA’s $3M investment in Actionfigure will help the public transit SaaS company build a repeatable sales model.
In May, TIMIA Capital announced a $3 million investment facility for Actionfigure (previously TransitScreen)—a Washington, D.C.-based SaaS company that delivers intelligent transit information to corporate campuses, commercial and multifamily buildings, universities, and airports. TIMIA chatted with Actionfigure CEO and co-founder, Matt Caywood, to find out more about the company’s mission, plans for the future, and why revenue-based financing was a perfect fit for them.
Where Actionfigure Began
It was never Matt’s intention to become an entrepreneur. However, as a Neuroscience Ph.D. student at the University of California, San Francisco, he identified a problem in the market: the amount of time wasted by people waiting for public transit.
As he contemplated better ways to make transit information available to help people get home faster and more efficiently, the early ideas for the Actionfigure technology began to take shape. Matt created a prototype for his own personal use, before moving to DC to work at a federal innovation lab. While there, an opportunity arose to help the city meet some of its transportation goals by creating transportation technology, such as the first true Actionfigure. After some time, the technology required commercialization so Matt stepped up and, together with co-founder and COO, Ryan Croft, Actionfigure was born.
For the first 18 months, Matt and Ryan bootstrapped the company, reinvesting cash from early customers as they proved out their product market fit. “We started out trying to sell to cities and transit agencies but discovered that selling to public sector is challenging for a young company,” said Matt. “We explored private sector opportunities instead. From our market research, we knew that the real estate vertical would be a good fit for us so we started there.”
The city was supportive of the project as there was a mandate to encourage private real estate owners to do more to promote sustainable transportation like transit and bikeshare.
At that time, Matt was still doing a lot of the programming, along with a handful of contractors. On the sales side, they only hired part-time, commission-based salespeople.
“We were very careful with cash in those early days,” said Matt, “We didn’t want to invest in more hires until we had proven we had a real market that could sustain those hires. It taught us to be very efficient with our capital.”
After raising some capital from friends and family, Actionfigure invested in a full-time customer support function as well as some salaried salespeople and developers.
“We have always been conservative when it comes to capital,” said Matt, “We’ve always ensured our revenue run rate matches the capital we raised.”
A few years later, to help fuel further growth, Actionfigure looked at some venture capital options. “The biggest thing missing in a second tier tech market like Washington, DC, is capital,” said Matt, “There just aren’t lot of investors here so we struggled to close a round, despite our wonderful traction.”
Instead of venture capital, they raised a small round with some great micro VC investors who really understood the real estate and transportation spaces. This helped them avoid the disconnect that Matt argues can occur when a VC’s personal experience is misaligned with the market problem that a startup is trying to solve.
Why TIMIA’s Revenue Financing Fit Actionfigure
Actionfigure started exploring revenue financing when they developed a very aggressive sales growth plan and needed capital to help them target more cities through inside sales.
“We looked at a variety of venture capital and revenue-based financing firms, but we wanted to choose someone who was the right fit for our high-growth, revenue-generating business,” said Matt. The management team, including Ed Kim, CRO at Actionfigure, attended the SaaStr conference with the goal of meeting with revenue lenders, venture debt lenders, and growth equity lenders.
“We cast a wide net at first, but TIMIA was the clear leader,” said Matt. “The real differentiator for TIMIA was that the team really understood that the capital should be used to support growth. The other investors had a mixed message about it.”
For example, some investors pitched investment products as working capital but wanted one third back in the first year. “How can you deploy working capital if you have to use a third for debt capital in year one?” asked Matt. “TIMIA was more supportive of our growth mindset. Their APR was competitive and we liked that, while it was revenue-based financing, it was structured more predictably, like a term loan, escalating our payments year over year.”
Actionfigure also liked that TIMIA offered repayment options at different points during the loan. Since they are on a fast growth trajectory, they were happy to have options open in case they raised growth capital down the road.
Matt and his team liked how transparent the TIMIA team was.
We did our due diligence, speaking to people connected with the VC world in Canada and we were reassured that the TIMIA leadership team had a stellar track record.”
Where Next for Actionfigure?
Actionfigure used part of the TIMIA investment to hire more engineering talent to improve the product. This resulted in a 60% increase in ACV in the past six months, and they intend to keep moving those metrics in the right direction.
They also plan to continue investing in building a repeatable sales model and marketing to continue to gain traction across North America. We look forward to following their progress!
Looking for non-dilutive capital?
TIMIA Capital works with recurring revenue technology
businesses between $2 – $20 million ARR.