This has come at a time when an increasing number of VC fund Creating a capital pool to meet the demand for loans and structured loans among small startups.
“… Used to be.” CredX cofounder and CEO Manish Kumar said.
Revenue-based financing is where lenders lend a certain amount of money to the business in exchange for an agreed percentage of gross revenue, for a specified period. In addition to the principal, these businesses pay the multiple agreed upon by both the parties.
“We have started working with now” You Fund, Incubator and Venture Debt Fund to identify companies that need growth capital we can Fund And may be prepared for equity round at a later stage,” Kumar said.
He said the fund will distribute between Rs 5 lakh to Rs 3 crore to such companies for two to 18 months.
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In April, the Tiger Global-backed company said it had entered into revenue-based financing to lend to small and medium businesses through its network of lenders.
Over the past two years, CredX has been disbursing loans through its revenue-based financing product to several brands selling on e-commerce platforms such as Flipkart, Amazon and Myntra.
So far, KredX has helped over 25,000 businesses and facilitated disbursement of Rs 7,000 crore.
Since small businesses typically do not have collateral to offer and equity dilution is expensive, such small-ticket loans help meet their working capital requirements.
The demand for such capital is increasing and several startups, such as Velocity, GetVantage, N+1 Capital, have entered the space.
In 2019,
KredX raises $26 million as part of its Series B funding round, Tiger Global and existing investors, including Sequoia Capital and Prime Venture Partners.
Founded in 2015 by Kumar and Anurag Jain, CredX helps businesses meet their short-term working capital needs by facilitating waiver of their unpaid invoices.
It provides small revenue-based loans to small and medium enterprises, especially in the Direct-to-Consumer (D2C) and Software-as-a-Service (SaaS) sector.