Financing Platforms – The concept of revenue based financing startup originated in the United States. It is a capital raising model that provide funds to startup and, in return, asks for a percentage of the gross revenue of that business.
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Do you know that the size of the global revenue based startup markets is expected to reach $42,349.44 million by the year 2027? It already reached $901.41 million in the year 2019. Its regular advancement indicates the growing popularity of such revenue driven startups model.
In this articles, we will discuss what exactly revenue based financing startup are. You will also be introduced to their future & the top 5 revenue based financing startup. Let’s dive in to explore more about them.
What are Revenue Based Financing Startup
Revenue based financing startup are known to be a helping hand for small businesses in need of financing. In this systems, small businesses or startup take fund to further their business. The investors in exchange sign an agreements that offer a portion of the company gross income to the investor.
Then, the company must pay the debt in periodic installment. Investor will continue to hold the company income shares unless and until the amount taken is returned to investor. The income based financing markets can be divided based on the following:-
- Enterprise size
- Region
- Industry vertical
Financing Platforms
Company size refer to the size of new companies. For example, the startups can be a small business, a micro business, or a medium business. The region base refers to the main region or communities of such new companies, observed globally. The markets is expanding its legs in regions including Europe, North America, LAMEA, and Asia Pacific. Vertical industry refers to the distribution of emerging industries in entertainment & media, IT and telecommunication, BFSI, healthcare, consumers good, etc.
BHIVE Investech
Founded by Shesh Rao Paplikar, Sandeep Gupta, & Monnappa Bayavanda, Bhive Investech is a leading revenue driven finance startup, established in 2014.
His investment & capital raising history speak for itself. BHIVE Investech has raised more than INR 28 crores investments for assets. The value is more than 15 million rupees when it comes to capital raised for the workspace.
BHIVE provides investment primarily in Commercial Real Estate CRE. It is known to manage the entire cycle from property sourcing to departure. This process includes the search for properties, legal due diligence, the purchase process, the possession of the property by the investors, the maintenance & generations of income, and the exit of the investments.
GetVantage
GetVantage is one of the largest revenue based financing platform in India, promising 1.8x post financing growth & has already financed over 350 successful brand. It has established different criteria for choosing startup for funding. The company has already financed more than $220 million in GMV Gross Merchandise Value for different brand.
It has a contract management systems and a credit resolution mechanism based on machine learning, which provide a score sheet to measure whether a particular startups is capable of receiving funding from GetVantage or not. GetVantage provide funding in various sector including eCommerce, D2C, SaaS, Food, Gaming, Health & Wellness, Beverage, Nutrition, Personal Care, Automations, etc.
Velocity
Velocity is owned by IIT Bombay alumni Saurav Swaroop, Atul Khichariya & Abhiroop Medhakar. Established in the year 2020, Velocity is dedicated to providing quotes for eCommerce & D2C startup in particulars. Velocity promises 3 F’s which refer to flexible, fast & fair financial requirement. (Financing Platforms)
It has a promising portfolio with more than 550 e-commerce investment. Brands that have raised capital from this platforms claim to have experienced 1.5x post funding growths. In his not so long search, Velocity has over INR 2100 crore+ bankable revenue connected to him.
To obtain funding from Velocity, a person must fill out an online form that requires informations about a startup cost details & income requirement. You will receive an email from Velocity within the next 24 hours. If your claim is approved, you will obtain the required funding within the next 4 days.
Klub
Klub is another revenue based financing startups in India that provides capital specifically to SaaS companies. You can finance your SaaS business with up to INR 30 crores of initial investment. Klub responds within 2 day of receiving the funding request. Klub’s 3 F’s for financial funding relate to flexible, frequent, and founder friendly budgeting. (Financing Platforms)
Klub rises by having over Rs 1,700 crore in portfolio income. More than 2,500 brand have registered on this platforms & the brand that received capital from it achieved 50% growth after funding. Provide fantastic capital solution for logistics platform, marketplaces, and gateways.
N+1 Capital
N+1 Capital was established in 2020 by Rahul Chowdhary & Ashish Singla. N+1 Capital invest in the companies that have more than INR 12 crore in revenue in the last fiscal year, have a gross margin of 25% or more, have no or low existing debt & have growths. (Financing Platforms)
The company pays more attention to innovative startup in its investments selection process. Others values that N+1 Capital observes in nominating its users include agility, data driven N+1 Capital algorithm, persistence, and empathy. It offers 4 times monthly income on the investments amounts. Their reimbursement mechanism asks for a monthly revenue share of 2% to 9%. The payback period varies from 1 to 3 years.
KredX
KredX is one of the largest supply chain finance platform in India that is meant to supports the growth of businesses without the inconvenience of any collateral. It is a platforms that allow companies to raise funds for their labor needs. (Financing Platforms)
KredX provides revenue-based financing services that are easily accessible to businesses withouts any collateral. Businesses can take advantage of this by simply allocating a percentage of their monthly or yearly revenue to the platforms. The company also offers various cash management solutions such as buy now pay later, account payable management, account receivable management, and more.
Conclusion
Therefore, the growing popularity and importance of revenue based financing startup seems to be in the veins of the world. It has also become fashionable among Indian businessmen. The successful operating companies mentioned above are the living example of the same. If you too have an amazing startups idea but are short on money, these financing startup are a one stop solutions to your crisis.