Former ItzCash exec Bhavik Vasa's fintech startup provides growth capital to businesses against revenue projections
In August 2018, Bhavik Vasa quit EbixCash from his role of Chief Growth Officer. A part of the company’s core team, he had been instrumental in scaling ItzCash, one of India’s foremost prepaid card players.
However, while scaling operations and increasing visibility for ItzCash, Bhavik came across the “ad for equity” model, which is still followed by several upcoming digital businesses and startups.
(L to R): Akash Mehta, Dealmaker (left); Bhavik Vasa, founder (centre) and Amit Srivastava, Technologist (right)
Ad for equity is a barter deal where media houses take a certain stake in companies, in return for advertising and promotions on their platform.
“In our case, we just couldn’t sign it. You don’t want to give up equity, which is critical for an emerging startup. But at the later part of my journey while scaling Via.com, I realised it was about how much more we can spend on digital marketing,” says Bhavik, a fintech veteran.
For context, in May 2017, US based Ebix Inc. acquired Itzcash, and subsequently, in November 2017, acquired online travel portal Via.
Bhavik, who quit EbixCash to go on a personal break, kept thinking of smarter ways to provide alternative financing to startups, for plans that would directly impact and improve their bottom line.
And that’s when the idea of his latest venturewas born.
Giving founders the advantage
Incorporated in August 2019, Mumbai-based GetVantage is a smart alternative funding platform that provides revenue-based financing for business owners, without the need for them to dilute equity or ownership.
It offers revenue-based financing (RBF), an alternative investment model that lets a company raise capital based on a data-driven projection of its future revenues. The founders do not need to put in their own equity, collateral, or personal guarantees.
“Equity is important and startups need to free up their equity lines, and use the capital (raised against it) for experimental projects that will open up new avenues of growth for the business,” Bhavik explains.
GetVantage recovers the amount invested as a share of the business’ future revenues. The amount typically includes the principal plus a flat fee.
“The traditional process of raising capital is complex, cumbersome, and doesn’t work for all enterprises and business owners,” Bhavik says. “We are the most founder-friendly capital solution as we are measuring potential, not just risk. We believe revenue-based financing can be a game-changer for the Indian startup and digital enterprise ecosystem.”
GetVantage encourages founders and companies to focus on “solving problems, generating revenues, growing sustainably, and staying true to their mission”.
The startup’s founding team includes IIT and IIM alumni. The financing platform is led by Akash Mehta (ex-Capital18, ex-Brand Capital) while Technology & Ops are led by fintech veteran Amit Srivastava (ex-StartupbootcampFintech, ex-AquaPay). Sachin Tagra, Partner, JSW Ventures, and former Head, Capital19, is an incubator advisor to GetVantage.
How does GetVantage work?
The fintech startup, which is targeting digital-first brands, claims to be built upon “a Founders First and Revenue First ethos”.
During the application process, GetVantage connects to the business’ (or client’s) platform, their Payment Gateway (PG), and revenue accounts through a set of APIs. It then starts the underwriting process, sifting through data of the past 12 months and bank statements.
This allows the platform to create revenue projections for the business and allot capital, based on those inferences.
GetVantage then disburses capital through a commercial credit card, which allows the fintech to keep track of the borrower, and ensure that spends are made only towards the main cause of the borrowing.
The fintech platform makes its collections directly from the borrower’s revenues; these are deducted at the time of settlement made to the business by the partnered payment gateways.
At present, the capital advances provided by GetVantage range between Rs 20 lakh and Rs 2 crore, without any interest.
The platform currently only supports financing for a business’ digital marketing spends, providing an alternative to the existing “ad for equity” model.
“We wanted to provide capital advances to founders for activities that would help yield direct growth in their business revenues,” Bhavik says.
He adds that GetVantage is looking to fund other business use cases and could even extend capital advances for digital infrastructure, such as AWS services, in the future.
Who are the real customers?
Bhavik explains that all digital brands that need capital advances and have a positive operating margin are its customers. He adds that the financing makes sense for businesses with an incremental digital marketing spend, upwards of Rs 10 lakh.
GetVantage is backed by hybrid growth fund Samyakth Capital, Venture Catalysts, Astir Ventures, and angels including Karun Arya (VP, Oriente fintech; ex-exec), Vivek Awasthi (CIO, CurrenciesDirect), Ashok Goel Family Office, Mitesh Shah (CFO, ), and Punit Shah (Innoven Capital).
The platform also has partnered with some NBFCs and debt funds.
Anuj Golecha, Founder, Samyakth Capital, and Co-founder Venture Catalysts, says,
“We’re excited to back GetVantage. Financing is entering an interesting phase and there is an urgent need to democratise the fundraising process. We’re excited to be at an inflection point of a new asset class getting structured in the form of revenue-based financing. On a personal level, I’m looking forward to learning from GetVantage’s journey of creating a new asset class.”
Revenue-based financing is a relatively new concept, and there aren’t many Indian startups exploring the space. The operational ones are mostly abroad, and include US-based Lighter Capital and RevUp Capital, and Toronto-based Clearbanc, which focuses on growth-stage digital businesses.
Clearly, the opportunity is large for GetVantage, and the founder is keen to tap it.
Bhavik is unwilling to reveal the current size of the platform’s loan book, but says that GetVantage aims to back over 200 brands in the next two years.
The fintech startup is also looking to expand into new markets across Southeast Asia, starting with Singapore, in the next two years.
(Edited by Teja Lele Desai)