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Pipe inks "mine now, pay later" deal with Bitcoin miner

Mar 22, 2022
Illustration of a pipe opened up with cash spewing out

Illustration: Annelise Capossela/Axios

Pipe, an alternative financing startup, is partnering with Compass Mining in a deal that will enable the bitcoin mining firm to offer a new type of buy now, pay later financing to crypto customers.

How it works: The so-called "mine now, pay later" offering lets Compass — or really, any company selling cryptocurrency mining hardware — to provide more flexible payment terms to customers.

  • Bitcoin mining equipment isn't cheap. Now, customers who purchase hardware from Compass Mining can pay for managed hosting services in monthly installments.
  • Compass can then trade those contracts on Pipe's marketplace and get paid upfront.
  • "This democratizes access for anyone that can afford a smaller down payment and make flexible monthly payments to be able to access their offering," Pipe co-founder and co-CEO Harry Hurst tells Axios.

The big picture: The key to this partnership is how it allows the company to extend its financing marketplace to new industries and verticals.

  • The API hooks into Pipe's broader platform that connects recurring revenue businesses with pension funds, hedge funds, and family offices — basically anyone who wants access to an alternative type of fixed-income yielding asset.
  • "What we're really building is a global trading platform for recurring revenue as an asset class," Hurst says.

Context: Pipe got its start offering financing to SaaS companies with predictable revenues before it expanded.

  • Today, SaaS businesses make up less than 50% of Pipe's business. Other sectors it serves include insurance companies, property management companies, and direct-to-consumer subscription businesses, according to Hurst.

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