Some businesses want to stay away from high-interest bank loans but also want to get equity funding. GetVantage wants to fill that gap. The Mumbai-based startup announced today that it has raised $36 million in funding. Aparajit will join the board.
Haldiram's Family Office was one of the participants. This brings the total raised by GetVantage to over 40 million dollars, along with a seed round in 2020. GetVantage has a number of debt lines with non-banking financial companies.
After working at Itzcash, Vasa co- founded GetVantage. The barter deal where media houses take a certain stake in companies in return for advertising and promotions on their platform caught my attention. After quitting his job at EbixCash, he continued to think of a way to provide alternative financing to startup companies.
Vasa said that the traditional process of raising capital doesn't work for all businesses. He said that the VC model is broken and based on who you know. It is difficult to find investors for founders with no network. They prefer not to sell control of their companies.
Vasa said that they have an advantage because they understand the needs of other founding fathers. The two met while working together.
It takes about two days for applications to be processed and five for funds to be made available. Over 4,000 businesses have applied for non-dilutive financing through its platform so far and received a total of $270 million in funding. Arata, Eat Better, Jade Forest, Naagin, Nua and Rage Coffee are some of its clients.
Financing decisions are made using the company's algorithms, which helps get rid of bias and makes the application process quicker. The credit decision engine is a proprietary machine-based learning model.
Companies applying for capital connect their digital marketing platforms to GetVantage's platform. They share their spending and revenue by doing that. A custom term sheet can be created in about 48 hours. After getting funds, clients repay a pre-determined share of their revenue.
Companies usually repay their financing in about six to nine months. The company charges flat fees between six and twelve percent. Repayments are linked to revenue and are flexible. If revenue goes up, a company pays back more in a certain month. The company pays less if revenue goes down.
GetVantage targets companies with strong fundamentals, recurring revenues and a revenue-vintage of between six to 12 months. Health tech, cloud kitchens, and nutrition are just some of the sectors it has worked in. According to the company, it saw 300% year-over-year growth in 2021, and helped its clients achieve 1.8x revenue growth after getting funding through GetVantage.
There are partnerships with a variety of businesses for entrepreneurs. Vendors on some e- commerce marketplaces can apply for funding directly through them.
In the long-term, GetVantage has its eye on Southeast Asia and the Middle East, but for the time being, it islaser focused on India, Vasa said, citing statistics that say the market opportunity for revenue-based financing is now $5
Varanium is looking to partner with teams that have a bold approach to solve massive problems. We are very excited to support Bhavik and the GetVantage management team in their next phase of growth and to help power India's digital economy.
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