GetVantage offers revenue-based financing to India’s founders – TechCrunch

Some SMEs do not wish to receive (or have access to) equity financing, but also wish to refrain from high-yield bank loans. That’s the gap that revenue-based funding platforms like Get Vantage want to fill. The Mumbai-based startup announced today that it has raised $36 million led by Varanium Nexgen Fintech Fund, DMI Sparkle Fund, along with returning investors Chiratae Ventures and Dream Incubator Japan. Aparajit Bhandarkar, a partner at Varanium Capital, will join the Board of Directors of GetVantage.

Other participants included the Sony Innovation Fund, InCred Capital and Haldiram’s Family Office. This brings GetVantage’s total raised to date to $40 million, along with a seed round in 2020, the same year it was launched by Bhavik Vasa and Amit Srivastava. GetVantage says it also has multiple lines of debt with non-bank financial firms to help scale its funding platform.

Vasa told TechCrunch he co-founded GetVantage after working as chief growth officer at fintech Itzcash. “I came across the ‘ad for equity’ model, a barter where media houses take a certain stake in companies in exchange for advertising and promoting them on their platform.” He then moved to a job at remittance platform EbixCash, and after After resigning, he kept thinking about a way to offer start-ups alternative financing.

“The traditional process of raising capital is complex, cumbersome and just doesn’t work for all companies and business owners,” Vasa said. Many online entrepreneurs are underserved, he added, because “the VC model is a bit broken and it’s really based on who you know.” It is difficult for founders without the right network to find investors. Some also prefer not to sell control and dilute ownership of their businesses.

Vasa said that he and Srivastava’s background as founders gives them an advantage because they understand the needs of other founders. The two met while running the fintech cohort Startupbootcamp.

GetVantage offers SMEs between $10,000 and $500,000 in equity-free capital, with applications processed in approximately two days and funds deployed in five days. It says around 4,000 companies have so far applied for non-dilutive funding through its platform and have received a total of $270 million in funding. Some of his clients are Arata, BoldCare, Eat Better, Jade Forest, Naagin, Nua Wellness, Rage Coffee, Sid Farms and Zymrat.

Funding decisions are made using the company’s algorithms, which are said to help reduce bias and speed up the application process. Its core technology is a proprietary machine-based learning model called the Credit Decision Engine and a cloud-based deal management system.

Businesses applying for funds connect their digital marketing platforms like Google or Facebook and revenue accounts like Shopify, Amazon, RazorPay or Stripe to GetVantage’s platform. This is how they share their company’s expenses and income over the past 12 months. GetVantage’s credit decision engine then generates a customized term sheet in approximately 48 hours. After receiving money, customers pay back a predetermined portion of their earnings until they have paid back the entire principal amount.

Vasa said companies typically repay the funding in about six to nine months. There is no interest, and the company charges flat fees ranging from 6% to 12%. “It’s important to understand that repayments are flexible and fully linked to earnings,” Vasa said. “So if sales go up, a company pays back a little more in a given month. If for some reason sales are down, the company will pay back a little less that month.”

GetVantage is industry and size agnostic, targeting companies with strong fundamentals, recurring revenue, and a 6-12 month revenue year. Its customers come from industries as diverse as SaaS, direct-to-consumer e-commerce, edtech, health tech, cloud kitchens, and nutrition. The company claims it saw 300% year-over-year growth in 2021, helping its customers achieve 1.8x revenue growth after receiving funding from GetVantage.

For entrepreneurs, GetVantage also has partnerships with a variety of companies including marketing, sales, logistics, and payment gateways. For example, some e-commerce marketplaces allow vendors to apply for GetVantage funding directly through them or through various payment gateways, marketing and logistics platforms.

Longer-term, GetVantage is eyeing Southeast Asia and the Middle East as potential markets, but is “laser-focused” on India for now, Vasa said. citing statistics That said, the revenue-based financing market opportunity is now $5-8 billion and is expected to grow to $40-50 billion as the direct-to-consumer market grows to $100 billion by 2025.

In a prepared statement, Bhandarkar said: “At Varanium, we look for partnerships with founders and teams that have a bold approach to solving massive problems. We look forward to supporting Bhavik and the GetVantage management team in accelerating GetVantage’s next phase of growth, unleashing capital and revenue for thousands of fast-growing companies that will power the future of India’s digital economy.”

GetVantage offers revenue-based financing to India’s founders – TechCrunch Source link GetVantage offers revenue-based financing to India’s founders – TechCrunch

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