Barcelona-based Factorial, an HR tech unicorn offering an all-in-one cloud platform for small and mid-sized businesses, just secured $120 million in non-dilutive funding from General Catalyst. The investment is laser-focused on one goal: fueling Factorial’s go-to-market (GTM) expansion.
Unlike traditional venture capital, this isn’t an equity deal or classic venture debt. Instead, the funding comes from General Catalyst’s Customer Value Fund, a unique model where the firm invests directly in a startup’s growth strategy — without taking equity.
Factorial’s decision to double down on sales and marketing comes as the company rides strong momentum. After first gaining traction during the pandemic with a free version of its platform, Factorial transitioned to a paid model. Today, it serves 13,000 paying customers and reports a sixfold increase in revenue over the last year.
Now, the company plans to leverage this latest cash injection to accelerate growth and widen its sales funnel. CEO Jordi Romero confirmed the funding allows Factorial to seize this window of opportunity while avoiding the distractions plaguing some rivals.
Factorial’s funding news lands amid escalating drama in the HR tech sector. Major players Deel and Rippling are locked in a legal battle over alleged corporate espionage tied to sales and marketing strategies. While Factorial says it is reviewing its operations to ensure no overlap or issues, the timing underscores the increasingly aggressive tactics surfacing in this competitive market.
For Factorial, the focus remains clear: use this capital to scale organically, build ethical go-to-market strategies, and avoid the messier side of SaaS growth.
This funding model gives Factorial flexibility without giving up ownership. The company will repay General Catalyst only from the gross profit generated by the customers acquired using the fund’s support.
General Catalyst bears the downside risk — if Factorial’s sales expansion doesn’t perform, Factorial won’t owe more. Pranav Singhvi, Managing Director at General Catalyst and architect of the Customer Value Fund, explained:
“Unlike debt, the company faces no downside. We back companies with proven sales consistency — usually late-stage or public SaaS players ready to scale faster.”
Factorial previously tapped the fund for $80 million in April 2024. With this new $120 million, its total borrowing under the program now hits $200 million.
Importantly, Factorial still has its $120 million Series C equity round from 2022 untouched, which valued the company at $1 billion. According to Romero, Factorial isn’t planning a new equity round soon but might explore a secondary round to give early investors and employees liquidity.
This model not only fuels growth but sets up deeper ties with General Catalyst — potentially opening doors for future equity investments if Factorial chooses that path.
General Catalyst has quietly grown its Customer Value strategy into a significant financing engine, with billions under management. The firm now deploys hundreds of millions monthly into SaaS, fintech, gaming, and DTC startups — positioning this as a new growth financing model for the future.
“We see this approach becoming a critical way companies finance GTM expansion,” Singhvi added.
