The investment of C$2 million generated a gain of around C$500,000 under TIMIA’s non-dilutive financing model, according to the Vancouver-based firm. Since the initial financing in December 2017, Wagepoint has paid TIMIA $2.7 million in a combination of return of principal, interest and early redemption payments.
The company called the $500,000 gain an example of the periodic gains that TIMIA's fintech platform has produced, which has a “meaningful impact” on its earnings per share. The buyout of the Wagepoint financing will be included in the firm’s 3Q consolidated results.
"Wagepoint is another success story for TIMIA's non-dilutive financing model allowing entrepreneurs to grow their companies without impacting their capital structure," said Mike Walkinshaw, CEO of TIMIA in a statement.
"The non-dilutive funds provided by TIMIA helped the maker of payroll automation software grow significantly over the past two years. Furthermore, TIMIA's successful exit reflects the strength of the recurring revenue software businesses in our portfolio and their continued success during these uncertain times due to the impact of the COVID-19 pandemic."
The specialty finance company provides growth capital to technology companies in exchange for payments based on monthly revenue, an alternative financing option that complements both debt and equity financing and allows entrepreneurs and existing stakeholders to retain ownership and control of their business.
Throughout its five-year history, TIMIA has exited nine revenue finance investments from a total of 28 investments. The exits have generated total gains of over $2.4 million in its consolidated income statement.
TIMIA said it has never realized a loss of capital on any of its investments.
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