IAN, Indifi Technologies launch Growth Stage Debt Fund for startups hit by COVID-19

Pioneer in the seed and early-stage investing, Indian Angel Network (IAN), in partnership with lending platform Indifi Technologies, has recently announced the launch of its Growth Stage Debt Fund. The fund will be used to provide working capital to IAN's portfolio companies, which have been struggling in these unprecedented times.

IAN's portfolio companies will be able to avail debt between Rs 10 lakh and Rs 2 crore, based on the revenue pattern of the business. The loan payment duration will be between 18 to 36 months, depending on the product structure of the startup, and the growth periodicity of the business.

Alok Mittal, CEO and MD at Indifi Technologies said in a statement:

“The idea behind this partnership is to create support system aimed at accelerating the growth trajectory of new-age startups looking to adapt and excel during these difficult times. We are delighted to associate with IAN, an organisation that is committed to enabling and empowering the country’s startup ecosystem. Together, we will leverage the dynamic synergy to facilitate growth-enabling funds to help IAN portfolio companies seamlessly navigate the highly-competitive and continuously evolving business landscape.”

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IAN’s decision to launch the Growth Stage Debt Fund, in collaboration with Indifi Technologies, is in line with its strategy to mentor, guide and support business continuity among startups.

The debt fund will be provided to startups in the SaaS business, direct-to-consumer online brands, enterprise services, edtech, digital media or advertising-driven businesses, and leasing businesses. B2B business applying for a loan should have minimum recurring revenue of over Rs 10 lakh per month and those in the B2C space should have a recurring revenue of over Rs 5 lakh a month. Eligible startups should also have at least 12 months of stable revenue history.

According to a statement issued by IAN, the sanctioned amount of the loan will be equivalent to 2x to 4x of monthly revenue, depending on the profit-margin of the business. These businesses should have had high growth rates -- between the range of 40 percent and 50 percent, or more prior to COVID-19.

Padmaja Ruparel, Co-founder of Indian Angel Network said:

"Several startups with a sound business model are struggling to keep up with their working capital needs due to a sudden impact on their business induced by COVID-19. We felt there was a requirement of a financial facility that addressed the needs of startups that did not want to dilute their equity at the moment. We are extremely delighted that in collaboration with Indifi Technologies, we have been able to launch this fund that aims to provide much-needed support to India’s startup ecosystem. This is the time to hand-hold our companies and help them in every possible way that does not halt operations and ensures business continuity.”

IAN is sector-agnostic and has funded startups across 17 sectors in India and seven other countries. Some of its portfolio companies are WebEngage, Druva, Box8, Sapience Analytics, WOW Momos, and Consure, among others.