SVB India Finance provides growth debt worth $1.6 million to the photo superstore, Zoomin
Zoomin.com is an online service that enables customers to store, share, and print their digital photos easily and in a cost effective manner. ZoomIn allows customers around the world to upload unlimited photos and securely share them for free, with friends and family. In a recent disclosure to ET, Zoomin has received a term loan of INR 8 crores (~$1.6 million) from SVB India. Zoomin previously raised funding from Sherpalo ventures and First Round Capital.
SVB India Finance is India’s premier venture and growth debt provider for high-growth companies. It was started in Mumbai in 2008 and is positioned as India’s first and only specialty lending business targeting high growth entrepreneurial companies in India backed by top-tier venture capital and private equity investors. They offer multiple sources of diverse debt capital including venture debt, acquisition financing, growth capital and capex financing. In the past year, SVB disbursed $20 million (about Rs 110 crore) through this asset class, termed venture debt.
Zoomin has a 32 member team and was founded by Sunny Balijepalli in 2008. Before ZoomIn, Sunny co-founded Half.com, where he was Chief Technology Officer. The company became one of the largest sellers of used books, movies and music in the world. Computerworld named Sunny a Premier 100 IT Leader in its annual ranking of Information Technology leaders. Half.com was acquired by eBay in July 2000 in a transaction valued at over $350 million. Sunny has a Master of Science degree in Information Systems from Drexel University. He commented, “”We could have raised equity funds but did not want to dilute stock.”
Here is what venture debt means according to SVB:
A start-up company typically receives several rounds of equity investment from its investors with each round providing sufficient capital to achieve predefined milestones. Upon reaching its milestones, a company will need to raise a subsequent round of financing to finance further growth. Providing some debt financing between VC rounds (“Venture Debt”) helps companies and investors ‘extend the cash runway’ of their investments. By using debt, the company is able to access capital without giving up as much equity. The debt can be used to finance the company’s growth and capital expenditure requirements enabling venture capital ‘equity’ to be reserved for funding business critical activities such as accelerating product development or making key hires.
Additionally, by providing companies with a flexible cushion of capital, venture loans serve to stretch the amount of time between equity rounds and help entrepreneurs reach the next valuation milestone in their company’s life cycle. Put differently, venture debt enables the entrepreneur to run the company for a longer period of time, increasing the enterprise value of the company, before raising more equity money.