This alternate financing platform bridging the funding gap for startups in India's funding winter

Indian startup ecosystem is facing a prolonged funding winter. This creates financing challenges for the new age startups and small & medium businesses in the country. With VC & PE funding drying up, many alternate financing players are bridging the gap of providing much-needed capital to startups and SMEs. GetVantage is one such player, which provides revenue-based financing. In a conversation with the Bizz Buzz, Bhavik Vasa, Founder of GetVantage said the company has provided financing to more than 1,500 players so far and is confident of emerging as a preferred financial partner to many startups and small businesses in coming years. He said the scope for alternate financing is immense in India given the scarcity of funds and the non-dilutive nature of revenue-based financing

Please provide a brief overview about the company. What is the motivation behind setting up ‘GetVantage’?

GetVantage is India’s leading alternative funding marketplace and growth platform providing fast, fair, flexible non-dilutive capital to SMEs. GetVantage makes data-driven investments from Rs 20 lakhs to Rs 20 crore to supercharge growth for businesses. The platform provides various non-dilutive working capital solutions for marketing, inventory, logistics, and other recurring capital expenditure to businesses. It has an investment portfolio of over 1,000 new-age businesses in India.

The traditional process of raising capital is complex, cumbersome, and simply doesn’t work for all enterprises and business owners. As a result, India’s burgeoning young entrepreneurs and their digital-first businesses continue to be highly underserved. We knew there had to be a better way. One that works for founders instead of against them. Today, the VC model is somewhat broken and based on who you know. Founders become dependent on the quality of their networks to make the right introductions to investors and can spend months courting them only to be turned away. Also, through VC funding, founders end up using the most expensive form of capital (equity) to fund growth. Hence, GetVantage was launched, with a simple thesis - for founders, by founders. It was started as a true founder’s platform to fuel and support other founders and the next phase of the India growth story with non-dilutive capital.

Startups across the world have been going through a deep and prolonged funding winter. How GetVantage is helping startups and small businesses to receive the much-required working capital?

At GetVantage, we help businesses through alternate-financing. This is easily accessible to everyone, provides greater flexibility, and more founder-friendly, digital, completely data-driven, fast, and collateral-free. One of the reasons many founders prefer this method of raising funds is that they no longer have to dilute ownership to raise funds for investment in areas like digital marketing, inventory, or product expansion.

How does the revenue-based funding work? Is this form of debt funding similar to structured debt that some fund houses provide to startups?

Revenue-Based Financing (RBF) is a type of financing in which the lender provides funding to a company in exchange for a percentage of the company's future revenue. Given the repayments are flexible, and based on the monthly revenue of the company, the funding vertical has established itself as a suitable and convenient method for financing businesses.

What is the usual interest rate of funds? What is the tenure of these loans? Can you give some perspective on the ticket size of this funding?

At GetVantage, we offer a suite of solutions to businesses, charging a flat fee between 6-12 per cent against the capital raised by a business (interest is charged only in fixed term financing). Under revenue-based financing, a lender provides funding to a company in exchange for a percentage of the company's future revenue. The range of funding is between Rs 5 lakh to Rs 2 crore with a tenure of up to 12 months. Similarly, we provide fixed term loan of Rs 5 lakh to Rs 2 crore with a tenure up to 12 months. In our SaaS Runway capital product, we provide fixed-term financing solution that empowers SaaS businesses with 40-60 per cent of their ARR (annual recurring revenue) upfront.

What is the prospect of alternate financing in India in the coming years? How do you plan to cash in the emerging opportunities?

Capital remains a big question mark for growing SMEs in the industry and with a $500 billion opportunity, this space wasn’t well tapped for a very long time. With a total of 64 million MSMEs today, only 7.7 million are digitized, and will require over $500 billion in credit capital by 2027. This vast market presents a significant opportunity, yet even with a few participants, meeting the entirety of the credit demand is impractical. GetVantage addresses this challenge for expanding businesses with its API-driven dashboard, harnessing the power of AI and machine learning. Our goal is to support numerous enterprises through technology, ensuring clarity and precision with no margin for doubt or mistakes.

What is the total disbursement by GetVantage in FY24? What is the GMV of funding so far?

We have funded more than $900 million in GMV for over 1500 SMEs and startups.

Where do you raise capital for funding? Can you provide some view on your funding partners?

We fund businesses via our NBFC arm GetGrowth Capital and our funding partners. We have long-term partnerships with over 15 leading NBFCs (Aditya Birla Capital, Incred, DMI, Samunati, Capsave, U Gro Capital, and Northern Arc among others) and banks including AU Small Finance Bank, and HSBC among others.

You have received an NBFC license. How much lending have you done so far through your own NBFC?

We have deployed between Rs 50-100 crore via our NBFC.

What kind of revenue growth rate have you seen in last 2 years? What are your expectations in terms of growth for FY25 and beyond?

We have seen revenue growth of 300 per cent year-on-year in the last couple of years and expect more aggressive revenue growth in FY25.

Are you profitable now? If not, any timeline for profitability?

We’re laser-focused on sustainable growth with profitability around the corner.

Have you raised capital so far? Are you planning to raise capital in the near future?

Yes, we have raised $ 41 million in equity and credit lines so far across two rounds. We raised $36 million strategic growth round/ Pre-Series A in June 2022 (equity and credit lines) and $5 million seed round in October 2020.

GetVantage is backed by leading Indian and Japanese investors, including Chirate Ventures, Varanium Nexgen Fintech Fund, Sony Innovation Fund, Dream Incubator Japan, DMI Sparkle Fund, and InCred Capital.

How many startups and small businesses have been funded so far? What kind of growth do you expect in terms of your customer base in coming years?

We've successfully financed over 1,200 startups and small businesses, and we anticipate this figure to increase exponentially in the years ahead. Currently boasting a repeat rate exceeding 70 per cent, we are continuously implementing measures to guarantee that our platform remains both sustainable and scalable. We’re confident of rapidly growing this to be able to serve the working capital requirements for tens of thousands of MSMEs in the short and mid-term and hundreds of thousands in the long term.