Funding technology businesses

How technology businesses typically fund growth

UK technology businesses split into two financing patterns by revenue model. Subscription-based and recurring-revenue businesses (SaaS, B2B software, marketplaces with steady take rate) can access a deep market of growth equity, venture debt, and revenue-based financing pricing against ARR or MRR. Project-based and consulting-led technology businesses look more like professional-services firms and access invoice finance, cashflow loans, and growth equity rather than ARR-priced debt.

For SaaS and recurring-revenue businesses past about £2m ARR, the financing market is mature and competitive. Specialist venture-debt funds price against ARR with growth-rate and burn-multiple overlays. Revenue-based financing providers advance against monthly recurring revenue with repayment tied to ongoing performance. Growth equity funds compete for businesses past Series A with strong retention metrics. The right answer depends on dilution tolerance, growth pace, and how the founder team thinks about runway versus equity cost.

For deep-tech, hardware-led, and capital-intensive technology businesses, the picture is more mixed. R&D-stage businesses are predominantly equity-funded with grant overlay (Innovate UK, ARIA, sector-specific schemes). Commercial-stage hardware businesses access asset finance against tooling and production kit, working-capital facilities against B2B receivables, and venture debt where the cashflow shape can support it.

What lenders and investors look at in technology files

For ARR-priced debt and equity, the metrics that matter are net revenue retention, gross revenue retention, magic number, CAC payback, gross margin, and the rule of 40. Files that present these directly with cohort analysis behind them get to terms quickly. Files that present headline ARR without cohort detail get repriced once the diligence team works through the underlying retention picture themselves.

For technology-services and project-based files, the underwriting picture looks more like business services. Customer concentration, contract length, contract-to-revenue conversion, and the gross-margin trail through completed projects are the headline metrics.

Product overlap

Bedrock places technology files into equity for growth-stage businesses and scale-up rounds, cashflow loans and venture debt for revenue-stage businesses funding growth alongside or instead of equity, invoice finance for B2B-billed technology-services businesses, asset finance for IT, hardware, and infrastructure-heavy operators, and property finance for HQ and major-office freehold acquisitions.

Worth checking before you apply

The cohort-retention analysis is the single document that moves a recurring-revenue technology file fastest. Net revenue retention by start-cohort, gross revenue retention by start-cohort, and a clear customer-segment-level read of the patterns let a specialist lender or investor form a view inside the first conversation. Files that present a flat headline retention metric without cohort detail underperform files that lead with the cohort breakdown, even when the headline numbers are comparable.

Venture-debt covenants tighten as cash runway shortens, and founders often miss the breach point because they read the covenant table once at closing and not again as burn accelerates. Specialist brokers monitor this proactively for clients still inside venture-debt structures.