Hardware-as-a-Service

HaaS is a model where companies pay recurring fees to use provider-owned equipment instead of purchasing it outright. In practice, HaaS serves as a vehicle to finance capital improvements with less upfront capital expenditure (“CapEx”), turning CapEx into a predictable operating expense (“OpEx”), removing upfront cash payments, and enabling companies to scale more efficiently. This shift helps accelerate technology adoption in industries where high upfront costs, uncertain payback periods, and operational complexity have traditionally slowed progress.

For investors, HaaS combines the growth potential of emerging hardware technologies with the stability of contracted, infrastructure-like cash flows. This duality explains why HaaS companies attract valuation multiples 59% higher than non-HaaS frontier tech peers, according to Silicon Valley Bank. Moreover, the model’s visibility into recurring revenues and contract-backed cash flows makes it attractive to both equity and credit investors seeking differentiated risk-return profiles in uncertain markets.

In 2022, S2G launched its Special Opportunities strategy to back differentiated business models that sit between traditional growth and infrastructure investing but hold the potential to unlock capital efficiency and resilience at scale. 

While HaaS is often associated with conventional equipment finance, S2G’s Special Opportunities team approaches it differently. We offer flexibility on structure and cost of capital to tailor solutions to the realities of each borrower. From an investment perspective, our underwriting emphasizes the durability of lease and offtake cash flows as primary security, rather than relying solely on equipment value, aligning financing with performance outcomes and positioning both borrowers and investors for long-term success.

Since we first launched our strategy, we have mapped nearly 200 HaaS companies across renewable energy, industrial efficiency, agriculture, and mobility, building a clear view of where HaaS models create durable value, where they fall short, and how capital can be deployed most effectively to accelerate adoption while protecting downside risk. Those learnings have informed this report’s development and S2G’s continued effort to advance capital-efficient models that drive both financial performance and positive outcomes for people and the planet.