How Grip Invest is tapping business models of Furlenco, Blue Tokai, Rentomojo, others to enable alt investments

Gurgaon-based Grip Invest is an investment platform that enables investors to pool their money and buy physical assets, which it then leases to rental-model companies. The startup has, so far, raised $3.6 million in funding.
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Nikhil Aggarwal says the earliest memory he has of trying to start a business was when he was eight years old. Growing up, every week was the dawn of a new business empire, he recalls, but most of his ventures, unfortunately, just lasted for a day.

Chalo, a mobility startup and private operator of city buses in India, was the first venture Nikhil committed to as a founder. It was there that he realised that the largest transport services providers — like Ola, Rapido Bike Taxi, even Chalo — did not prefer owning vehicles, but rather leasing them.

“Businesses like Ola, Furlenco, and even Amazon Web Services are really a layer of technology where the physical asset — car, furniture, server — is or will be owned by someone else, which means leasing is a growing space,” Nikhil tells YourStory.

Leasing has a lot of benefits for such companies: it's not only cheaper, but more efficient in the long term since they can upgrade their inventory with newer models of the asset at little or no cost.

Grip Invest team (Image credit: Grip Invest)

Nikhil decided to capitalise on the growing popularity of the leasing model and the burgeoning rental startup space, and set up Grip Invest— an investment platform where investors pool their money, purchase physical assets, and lease to rental companies.

“We realised that individual investors have very limited investment options — all our friends and family were just investing in stocks or bank deposits. We knew other products existed and that there was an appetite for them but they just were not available to individual investors,” Nikhil says.

Grip Invest solves that problem by giving investors the option to invest in several forms of assets at a higher fixed income return rate.

How it works

Grip Invest essentially bridges the demand and supply side of physical, rentable assets, as well as connects retail investors to this ecosystem. Investors can get started by putting in as little as Rs 20,000 in a special purpose vehicle (SPV), which the startup uses to acquire physical assets.

It then leases these assets to companies that need them, earning a monthly rental income that goes back to investors as returns.

Grip Invest says the model can offer investors an IRR of 15 to 20 percent — higher than most mutual funds, fixed deposits, and other investment instruments.

“At the same time, we offer companies the opportunity to reduce operational costs and meet capital needs without worrying about tough credit requirements by traditional equity providers,” Nikhil says.

Grip Invest identifies assets for investment opportunities, inks deals with leasing partners, and monitors the investment over the rental period to ensure investors get paid on time.

The startup currently has a registered user base of 75,000, from 42 countries and 322 cities. Most of its users currently fall in the 25-40 age group, earn Rs 20 lakh-plus, and are based in Tier 1 cities. As many as 4,500 users have made at least one investment, and the startup has processed Rs 13 crore so far in returns to investors.

Revenue and funding

Nikhil says the startup earns its revenue mostly via commissions. It charges users a 2 percent commission on the monthly returns they receive — so Grip gets paid only when investors on its platform get returns — and a 1 percent upfront processing fee from its leasing partners (lessees).

Its annualised revenue run rate is Rs 7.2 crore.

To date, Grip Invest has processed and leased assets worth Rs 100 crore, to over 40 different leasing partners including Udaan, Furlenco, Faballey, Blue Tokai Coffee, Zypp, Vogo Automotive, Loadshare, ChargeZone, and FleetX, among others.

In terms of funding, Grip has, so far, raised $3.6 million from investors including Anicut Capital, Ankit Aggarwal from Navi, and the founders of Cashfree Payments, among others. The founders have personally invested Rs 15 lakh.

The startup said it is looking to add more projects to its portfolio over the next 12 months, and hopes to "manage assets worth Rs 1,000 crore by September 2022".

"When people think about where to open an FD, it is HDFC Bank; when they think about stock investing, it is Zerodha. Our ultimate dream is that when investors think about making new-age investments, they should think about Grip," Nikhil says.

Grip Invest’s competitors include other alt-investment platforms such as Strata, LegalPay, RealX, Pyse, hBits, and India Investment Grid, which facilitate investments in an array of assets, including real estate, sustainable projects, and litigation.

Investments raised by alternative investment funds in India grew at a CAGR of 74.4 percent between 2014 and 2020, hitting $27 billion by September 2020, according to a research report by Aranca, signalling that investors are looking beyond stocks, bonds, and mutual funds to grow their wealth.

Investors committed $55.5 billion in alternative assets (growing at 65.5 percent CAGR) over the 2014-2020 period, Aranca said, adding investments by alternative investment funds in alternative assets hit $22.7 billion, growing at a CAGR of 75.2 percent in the same period.

Edited by Teja Lele Desai

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