Tech CU Subsidiary Lends $8 Million to E-Commerce Company

Technology Credit Union of San Jose, Calif., announced Tuesday that its business lending subsidiary is participating with $8 million in a $30 million loan to an e-commerce company.

Tech Capital, LLC, the asset-based finance company and wholly-owned subsidiary of Tech CU ($3.9 billion, 143,674 members), is participating in a term loan originated and led by Multiplier Capital of Washington, D.C.

This loan will serve the growth capital needs of one of Multiplier Capital’s portfolio companies – a venture-backed, growth stage, e-commerce company.

“Multiplier Capital is a well-respected venture debt firm with an impressive track record,” Tech Capital Managing Director Joe Anzalone said. “They also have a lending strategy that complements Tech Capital’s asset-based lending approach – making them an ideal partner.”

Multiplier Capital was founded in 2012 by Ezra Friedberg and Ray Boone, both general partners.

Tech Capital, founded in 2015, provides asset-based loans for mid-sized companies and businesses.

“Tech Capital has a reputation for excellence in the asset-based lending world,” Boone said. “We were impressed with their speed and ability to execute on this opportunity and look forward to collaborating again in the future. We see great synergies in partnering with Tech Capital with other portfolio companies we are supporting.”

Multiplier Capital provides secured loans to rapidly growing, professionally backed companies. The Multiplier partners have invested more than $1.5 billion across more than 150 transactions over the past 19 years.

Its portfolio includes businesses within a broad swath of growing industries, focusing on enterprise software, digital media, healthcare IT, consumer e-commerce and tech-enabled services. Its investment criteria includes:

• Consistent and growing revenues in excess of $5 million.
• Proprietary product or differentiated market niche.
• Active and engaged equity sponsors supporting the business.
• Clear path to profitability, with earnings before interest, taxes, depreciation and amortization (EBITDA) reaching breakeven within 18 to 24 months.

Its active investments include Apogee, Arroweye, Aviacode, BlackLynx, Burrow, CatchCo, Drop, Flaviar, JOOR, Leanplum, NinthDecimal, OneHope, OpenSlate, PayNearMe, Rocket Lawyer, Room, Second Nature, SiteSpect, Spectrum Media Services, Touch of Modern, Tradesy, Updater, Verisma Systems, Whalerock Industries and Winc.

Tech CU produced $10.8 million in real estate-backed commercial loans in the first quarter, accounting for 2% of total loan originations. Commercial real estate loans in the first quarter were 32.9% lower than in 2020’s first quarter. Last year commercial real estate loans fell 25.1% to $41.2 million.

Among mid-sized credit unions with assets between $1 billion and $4 billion, real estate-backed commercial loans accounted for 6% of total originations in the first quarter. Production was $3.4 billion in the first quarter, up 25.5%, and originations last year were $11.9 billion, up 34.4%.

Tech CU’s net income in the first quarter was an annualized 1.59% of average assets, up from 0.98% ROA in 2020’s first quarter. ROA last year was 1.08%, down 1 basis point.

ROA for mid-sized credit unions was 1.00% in the first quarter, up 48 bps, and ROA last year was 0.71%, down 20 bps.