According to EU-Startups, Valencia-based HRTech startup Sesame has secured up to €50 million in growth funding through a unique financial instrument developed in partnership with BBVA Spark. The funding, designed specifically for SaaS companies looking to scale internationally without giving up equity, will enable Sesame to accelerate its expansion into key European markets including France and Germany while maintaining full ownership. Founded in 2015, Sesame has grown into one of Spain’s most prominent HRTech players, currently serving over 15,000 companies and generating more than €20 million in annual recurring revenue with a team of over 350 employees based in Valencia’s innovation-focused La Marina district. This financing model marks a significant departure from traditional venture capital approaches in the European technology ecosystem. This development signals a broader transformation in how successful SaaS companies approach growth financing.
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The Equity-Free Revolution Gains Momentum
The Sesame-BBVA Spark partnership represents a maturation of alternative financing models that have been gaining traction across Europe’s technology landscape. Unlike traditional venture capital or even venture debt, this instrument appears to be structured around performance metrics, recurring revenue validation, and scalability potential. For established SaaS companies like Sesame that have demonstrated consistent revenue traction—evidenced by their €20 million ARR—these performance-based instruments offer a compelling alternative to dilution-heavy funding rounds. The timing is particularly significant as many European tech companies face valuation pressures and investor caution in the current economic climate.
HRTech’s Coming Consolidation Wave
Sesame’s substantial funding comes amid a fragmented but rapidly evolving European HRTech landscape. While the sector has seen numerous smaller funding rounds—from UK’s Zelt (€5.7M) to Italy’s Skillvue (€5.5M) and France’s Maki (€26M)—the scale of Sesame’s financing suggests we’re approaching an inflection point. Companies that can secure this level of non-dilutive capital are positioned to become consolidators rather than acquisition targets. The focus on international expansion, particularly into markets like Germany and France where local competitors like Ordio operate, indicates that Sesame is building the war chest needed for both organic growth and potential strategic acquisitions.
The AI-Driven Talent Management Evolution
Sesame’s positioning in the AI-powered talent management space reflects broader industry trends toward automation and data-driven decision making in HR. What sets successful platforms apart isn’t just the AI technology itself, but the depth of integration into existing workflows and the quality of data being processed. With over 15,000 companies using their platform, Sesame has accumulated substantial training data that creates significant competitive moats. However, the challenge remains in maintaining innovation velocity while scaling internationally—a balance that requires continuous investment in both product development and market-specific customization.
Spain’s Emerging Tech Leadership
This deal underscores Spain’s growing prominence in the European technology ecosystem. From Valencia’s emergence as a tech hub to Barcelona and Madrid’s established scenes, Spanish startups are demonstrating they can compete at the highest levels of innovation and financing sophistication. The fact that a Spanish bank developed this innovative instrument specifically for tech scaling speaks volumes about the maturity of the local ecosystem. It also suggests that traditional financial institutions are finally understanding the unique needs of high-growth technology companies and adapting their offerings accordingly.
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The Hidden Challenges of Alternative Financing
While equity-free financing sounds attractive, it comes with its own set of risks and constraints. Performance-based instruments typically include covenants and repayment structures that can create cash flow pressure during market downturns or unexpected challenges. Unlike equity investors who share both upside and downside risk, lenders maintain priority claims regardless of business performance. For Sesame, the pressure to maintain growth momentum to service their financing could influence strategic decisions, potentially favoring short-term revenue gains over long-term product vision. The true test will be how they balance aggressive expansion with sustainable unit economics.
Broader Implications for European SaaS
This financing model, if successful, could fundamentally reshape how European SaaS companies approach growth. We’re likely to see more financial institutions developing similar instruments, creating a new asset class between traditional banking and venture capital. For founders, this provides additional leverage in funding negotiations and alternative paths to scale. However, it also requires sophisticated financial management and transparent performance tracking—capabilities that many early-stage teams lack. As Sesame demonstrates the viability of this approach, expect to see more mature SaaS companies exploring similar non-dilutive options, potentially reducing their reliance on traditional venture capital in later growth stages.
