Factorial, a Spanish HR platform, has secured an €80 million investment from U.S. VC firm General Catalyst. This investment, described not as a funding round but as a "go-to-market investment," is uniquely structured as contained debt aimed solely at customer acquisition, with repayments made from new customer revenues. This arrangement allows Factorial to avoid asset risk and equity dilution. CEO Jordi Romero emphasizes this funding model suits SaaS businesses with strong customer retention, viewing it as a strategic move to preserve cash for significant future investments like M&A without further equity dilution.



Factorial, the Barcelona-based all-in-one business and HR management software for small and medium businesses (SMBs) globally, today announces the closing of an $80 million Go-To-Market investment from General Catalyst’s Customer Value strategy

Factorial’s customer base has proliferated from 70 to over 10,000 since 2019 and this latest financing will enable Factorial to continue to grow until becoming cash-generative with minimal constraints on the balance sheet. The company still has over $100 million in the bank from its $120 million Series C round in October 2022, when it reached unicorn status

The All-In-One business platform

Factorial, as a SaaS business, typically spends upfront cash to sell their product to new customers and grow the business. While the investment is profitable over time, it creates a near term cash outflow for Factorial. Through General Catalyst’s investment, Factorial can accelerate growth by financing parts of those costs with the investment without putting a dent on its balance sheet or diluting existing shareholders, while not encumbering the company as General Catalyst owns the downside risk.

This latest cash injection, complementing the triple-digit millions retained from Factorial’s successful 2022 Series C round, fortifies Factorial’s position to advance its current growth trajectory with unprecedented flexibility on its balance sheet. This financial reinforcement not only preserves equity but also enables strategic investment in product development and engineering. As a result, Factorial can accelerate the delivery of superior products to its customers.

“As one of the fastest-growing software companies in Europe, we wanted the ability to keep our growth trajectory without ever needing an equity round. This partnership with General Catalyst is exactly what we were looking for. We can focus on building great products and helping more customers without worrying about fundraising”, said Factorial CEO and co-founder Jordi Romero. “General Catalyst is one of the most reputable tech investors in the world and that made the process very easy. They understand the quality of the business and the market.”



“Having known the Factorial team for years and seen their growth trajectory and the performance of its customer cohorts, General Catalyst strategically chose to invest and turbocharge the company’s go-to-market strategy. This decision aligns with our objective to identify and support innovative ventures with substantial market impact,” added Pranav Singhvi, Managing Director at General Catalyst.

“We think the sales and marketing funding is something of a game changer for Factorial. Thanks to General Catalyst, we will be able to accelerate our customer acquisition efforts, in a capital-efficient manner, thereby ensuring sustainable fast-paced growth while effectively doubling the return on equity for our investors,” said Factorial’s CFO, Moran Laufer.

“This investment is a strong testament to the resilient, high-quality business, as well as GTM engine, Jordi, Bernat & the Factorial team are building and serves as additional validation of Factorial emerging as a category-leading European technology business,” said Atomico Partner Luca Eisenstecken, who led the previous Series C financing and joined Factorial’s board as part of that round.