by Paul Gillin
Wasabi Technologies Inc. today said it has secured a $250 million credit facility, choosing to forego equity financing for the flexibility of debt.
The decision highlights an issue that often faces growth-stage companies: how to fund expansion without overburdening the business or diluting ownership.
It’s not that the cloud storage provider is hurting for cash. The 10-year-old firm has raised over $600 million in total funding on a valuation of $1.8 billion. That includes a $70 million equity round this past January. The Boston-based company is now shifting more of its financing mix toward credit as its capital needs evolve, according to Chief Financial Officer Michael Bayer (pictured).
Bayer said the decision to opt for credit reflects a conventional but often misunderstood principle of corporate finance.
