Today, Manchester-based fintech, Lemon, is announcing it has successfully raised its pre-seed funding round, securing £500K to support the business through the next stage of development.
Led by SFC Capital, the UKs most active early stage VC, and Pitchdrive, a European fund specialising in pre-seed and seed investment, this backing offers more than monetary value, as the investor team brings a wealth of expertise and guidance for Lemon from the beginning of its growth journey. In addition to the leading VC investment, Lemon has also received angel investment from ex Partner of Debt Advisory at KPMG, Nick Dodd, and Co-Founder of fintech communications agency, SkyParlour Started, who both join the Lemon advisory board.
At its core, Lemon is a platform that allows SMBs to discover, finance, and control their SaaS. According to research from Lemon, SMBs can spend upwards of £30,000 on SaaS software each year, however some businesses are completely unaware that their SaaS expenditure is so high. Using Lemon, SMBs can manage their subscriptions in one place to establish overspend, gain clarity of company-wide SaaS usage, and streamline business costs, reducing average spend by 20%. Many SMBs rely on software subscriptions to increase efficiencies within their business, through HR, marketing, and accounting programs. Through the Lemon subscription management tool, SMBs are able to save thousands on these software subscription expenses, with zero additional work.
Following the successful raise, Lemon will now hone in on product development, assisted by the appointment of new Chief Technical Officer, Matt Parke, and soon a new Content & Community manager. During this development stage, the focus will be continuing to work with its early customers to tailor the product directly for the most pressing needs, optimising tools, and focussing on moving towards early product/market fit, continually working to reduce SaaS spend for SMBs. Furthermore, Lemon will eventually increase its product functionality to include cost saving instant credit options for SMBs, both from the Lemon dashboard and at the software vendor’s checkout allowing them to capitalise on discounted annual software subscriptions offered by vendors, whilst being able to retain the comfort of monthly payments.
This raise is particularly significant as it shows there is still demand for new fintechs which can solve real problems for real businesses across the globe, despite the challenging economic climate. Furthermore, SaaS fintechs are currently seeing a drop in funding and interest from investors, making the closure of this round even more prevalent.
Speaking on behalf of the lead VC, SFC Capital, on the raise, Ed Stevenson, Investment Executive, said: “We are really excited to be backing Lemon in their pre-seed round. SaaS is a huge spend for many businesses so being able to reduce costs, centralise management and easily spot inefficiencies is hugely valuable. We believe that Lemon can scale into a dominant product with their vision to introduce instant credit, payments, discoverability and analytics. We are glad to be part of the journey with Matt and the team.”
Co-Founder and CEO of Lemon Matt Bird commented: “It’s clear that we’re going through a really interesting period for SMBs at the moment,. Taking into consideration the challenging economic landscape with funding drying up everywhere you turn, SMBs now need the tools and services to help them build better businesses as cost-efficiently as possible. With software being the third largest spend for an SMB, we really think Lemon can become a core part of how an SMB uses SaaS.
“We’re really excited to be backed by two fantastic investment teams at SFC Capital and Pitchdrive, who not only believe in our vision and the future we want to build, but bring a wealth of knowledge alongside the funding we need to continue building Lemon and ultimately support as many SMBs globally with their growth trajectory too. There’s a long road ahead, but we’re really excited to be on this journey with our new investors.”
Koen Christiaens, Co-Founder and Managing Partner at Pitchdrive, also said: “We fully believe in the vision of Lemon and can see how much of a gamechanger the solution can be for SMBs. Managing subscriptions remains a chaotic task for most businesses, so having a single view of subscription spend, coupled with the ability to access sustainable finance which reduces burn and promote cash-flow efficiency, makes us very excited. We believe Lemon can become a household name for the SaaS industry over the next couple of years.”