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Arc closes $20M to build a digital bank for software startups

Arc dashboard
Image credits: Arc

San Francisco-based Arc, the future of startup finance, has closed $20 million in Series A funding. This round increases total capital raised to $181 million over the last 12 months, with $31 million in equity and a $150 million credit facility.

The round was led by Left Lane Capital and saw participation from other investors, including NFX, Y Combinator, Clocktower Technology Ventures, Torch Capital, Atalaya, Bain Capital Ventures, Soma, Alumni Ventures, and Dreamers VC, as well as the founders of Wayflyer, Plaid, Column, Chargebee, Vouch, and Jeeves.

Build digital bank for software startups

Arc will use the new funding to accelerate its growth and expand the availability of its treasury and software products built to help startups access and manage capital while retaining equity. The company also announced that Dan Ahrens, Managing Partner at Left Lane Capital, will join its Board of Directors.

“We are building the #1 digital bank for software startups,” said Don Muir, Co-Founder and CEO of Arc. “For the first time, startups can tap into their future revenue to access capital without dilution, deposit those funds into an FDIC-eligible account, and leverage proprietary finance software to optimize growth. We’re thrilled to join forces with this talented group of investors who bring relevant experience transforming fintech and SaaS startups into market-leading platforms. This capital injection will help us build and scale Arc Treasury to meet the digital banking needs of a new generation of software-driven businesses.”

“Arc is setting the industry standard with its innovative financial solutions that help early-stage companies secure, spend and save capital without having to give up equity,” said Dan Ahrens, Managing Partner at Left Lane Capital. “We’re confident that the Arc team has the leadership, vision and expertise to redefine the alternative financing category and help startups grow sustainably, innovate and create new markets as we enter the next era of the economy.”

Defines future of startup finance

Founded by Don Muir and Nick Lombardo in January 2022, Arc graduated from Y Combinator in March. The company that defines the future of startup finance believes that premium startups deserve a premium non-dilutive and non-debt funding alternative, along with financial tools to scale faster on their terms.

Arc recently expanded its suite of fintech tools with the launch of Arc Treasury in June 2022. Arc Treasury is a digitally native and vertically integrated cash management account that enables startups to access the essentials including instant deposits, free money movement, unlimited cards, spend control, and market-leading benefits without the drawbacks of legacy offline financial institutions.

The company’s other solutions include Arc Advance, which allows founders to convert future revenue into upfront capital, and Arc Runway, which helps startups analyse their net cash burn to more efficiently deploy their capital to maximise runway.

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