5 revenue-based financing platforms enabling early-stage startups to scale

Revenue-based financing (RBF), a popular fundraising model in the United States, is taking off in India to enable young startups to access funding. The model allows startups to raise funds from investors, who, in return, receive a percentage of a company's gross revenue.

This data-driven approach has changed the traditional way of fundraising and offers multiple benefits to both companies and investors. The RBF funds primarily offer capital to SMEs (small and medium enterprises) and early-stage startups in sectors including D2C (direct-to-customer), SaaS (software-as-a-service), and edtech. It enables companies to raise capital by pledging a percentage of their future revenues.

RBF funds offer a mix of debt and equity financing, and are focused on tech-based businesses. The model fits well with the Indian startup ecosystem as new startups enter the market with an RBF option to get short-term fundraising.

YourStory has curated a list of fintech startups and alternative lending platforms that are providing non-dilutive, quick and seamless access to money.

GetVantage

Founded in 2019 by Bhavik Vasa, Amit Srivastava, and Sachin Tagra, Mumbai-based GetVantage is a revenue-based financing platform which aims to democratise access to growth capital. It offers short-term growth capital to startups without them having to dilute equity.

The financing platform uses a proprietary ML (machine learning)-based credit decision engine and a deal management system to evaluate and gauge a startup’s future revenue performance, and offers a term sheet based on its findings.

The data-driven platform provides advance capital at no interest and no hidden charges.

The startup wants to build an ecosystem that understands the dreams and aspirations as well as the setbacks.

Additionally, GetVantage helps its portfolio companies access over 25 operational services that can help them streamline their operations. It has invested across sectors including SaaS, D2C, ecommerce, gaming, food and beverages, health and wellness, nutrition, automation, personal care and more. Its portfolio of brands include Rage Coffee, Arata, Super Bottoms, Flo, and Dr Sheths, among others.

BHIVE Investech

BHIVE Investech, a Bengaluru-based fintech startup, gives retail investors access to highly curated and vetted investment opportunities.

The startup’s revenue-based financing product enables investors to earn a 2.6X return on their investment by giving a projected average return of 2.4 percent per month for nine years with capital protection.

BHIVE leverages its expertise in the co-working space and aims to provide an end-to-end solution for all commercial real estate investments. It democratises investment in commercial real estate (CRE) by disturbing high-value properties.

Klub

Founded by Ishita Verma and Anurakt Jain in 2020, Singapore-based fintech startup Klub focuses on growth capital for brands through revenue-based financing.

The startup uses financial innovation, community engagement, and deep data-driven analytics to provide skin-in-the-game growth capital to entrepreneurs of much-loved brands across sectors.

The startup claims an ideal investment platform for businesses that need flexible and non-dilutive capital but, at the same time, want to retain complete control of their business.

Klub charges a percentage of the revenue generated by companies it funds, with ticket size varying between

Rs 2 lakh and Rs 30 crore.

ALSO READ

Worship the virtual way: Delhi startup VAMA leverages tech to bring spirituality, astrology to your doorstep

In September 2021, the startup raised Rs 20 crore in debt from Trifecta Capital to scale technology, product, and assets under management, and serve as a partnership opportunity for both brands to collaborate on various ways to support digital-first brands.

Velocity

Velocity, a Bengaluru-based company founded in 2020 by IIT Bombay alumni Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, provides RBF options for ecommerce and D2C brands.

The startup offers non-dilutive and collateral-free growth capital. It offers ticket sizes from Rs 5 lakh to Rs 3 crore to online businesses that spend online to acquire customers, accept online payments, and generate healthy revenues.

Velocity’s vision is to be the easiest and fastest way for new-age businesses to raise growth capital.

In November 2021, the startup raised $20 million in a Series A round led by Peter Thiel’s Valar Ventures to build multiple products for thousands of new-age businesses.

N+1 Capital

Delhi-based N+1 Capital, founded by Ashish Singla and Rahul Chowdhury in 2020, is an investment firm that provides funding on a share of revenue basis.

It offers growth-stage capital with ticket sizes starting from Rs 1 crore to Rs 15 crore. The firm provides access to capital at a premium, without taking any equity shares or collateral from the company.

It takes a percentage of the borrowing entity’s monthly revenues, and gives steady returns to its limited partners quarterly.

N+1 Capital aims to provide capital to more than 100 entrepreneurs during its lifecycle, and has partnered with investment platform LetsVenture as its venture partner.