Revenue-based financing platforms have gained ground in the past two-three years as small and medium enterprises (SMEs) and direct-to-consumer (D2C) companies tend to choose them over debt financing from banks and non-banking financial corporations (NBFCs). The reasons for this shift include fast remittance, less paper-work and flexible repayment options.
Currently, there are a clutch of revenue-based financing platforms operating in India and we spoke briefly to one of the key players, GetVantage, to understand its adoption, growth and future course.
GetVantage provides short-tenure growth capital in the range of Rs 30 lakh to Rs 30 crore and claims to have provided capital to 500 companies.
“We charge anywhere between 6%-12% of total requirement as a service fee which could be structured in a 6-16 months period,” its founder and CEO Bhavik Vasa told Entrackr in an interview.
GetVantage claims to have invested across sectors such as e-commerce (majorly D2C), SaaS, cleantech and electric vehicle ecosystem. BluSmart, The Ayurveda Company, Rage Coffee, Buyofuel, ChargeZone are its notable backings.
“About 60% of our portfolio are bootstrapped and over two-third of businesses come to us now and then for working capital. Our typical average investment is about 45 to 50 lakhs but we do invest up to $2 million to businesses which are large and mature,” said Vasa.
Founded in 2020, Getvantage has invested Rs 300 crore till now.
“Most of the capital deployed through over a dozen partner lenders but we recently got an NBFC license and are in process to raise Rs 200 crore,” added Vasa. “Overall, we have exposure to lend over Rs 700 crore including Rs 500 crore from third-party lenders.”
GetVantage appears to be a leader in the revenue-based financing space as it has an early mover advantage. With $41 million, it also managed to raise the largest funding among its peers. Its competition includes Klub, Recur, Bhive Investech, Velocity and a few others.
While the company is yet to file its financial statements for FY23, it claims to churn Rs 16 crore in operating revenue. GetVantage registered a 13X growth in its income from FY21 to FY22.