The revenue-based FINANCING COMPANIES model is a capital raising method that focuses on the future revenues of a company. Typically, the model is used for startups that are seeking funds for working capital needs like inventory and marketing spends. The investors look at the current revenues of the company and the projected growth and then make an investment decision. Investors are paid a fixed sum of revenue every month ensuring that the interests of the investors and the founders are aligned. To know more, read this detailed guide on revenue based financing.
Since the model is just gaining traction in the Indian startup ecosystem, it is important that you do your research and choose the best revenue-based-financing company to work with.
Best revenue-based financing companies every start-up founder should know about.
Velocity is India’s largest revenue-based financier. Founded in 2020, the company claims to have funded about 550+ Ecommerce businesses and boasts 2100 Cr fundable revenues as of Aug 2022.
Their team consists of folks with strong pedigree in the domain and has funded brands like – Bella Vita Organic, Smoor, Crossbeats, Greensoul, Waterscience, Walmantra, Imagimake, Setu, Jhaji, French Crown, The Clownfish and many more.
Velocity’s revenue-based funding is a fresh, new alternative to traditional ways to fund businesses like bank loans and VC funds. The entire process is digital and D2C/Ecommerce founders don’t need to wait for months to get funded. D2C founders with healthy revenue streams can get funds up to INR 4Cr without diluting their equity. To get funded, they simply have to apply for revenue-based funds on their website and get a term sheet in 30 sec. Fund disbursals happen in one week. This type of financing is best for your working capital needs like inventory management and boosting marketing during festive seasons or otherwise.
They also have an interesting analytics product that helps D2C founders keep a tab on 6 key business metrics from a single dashboard.
- Braavo – Braavo’s performance-based financing model is designed for mobile applications related entrepreneurs. If you’re an app entrepreneur, you know that the mobile app ecosystem is changing dramatically. The first step toward success is capitalizing on these trends. What are the trends that are giving you the most opportunities to succeed and grow? At Braavo, they love to talk about the opportunities unlocked with new technologies. These disruptive trends can improve your business and provide huge value to your users. But what if there’s a better way to go about making this happen? What if there were a company that could help you scale your business with no equity required? That’s where Braavo comes in. Braavo was founded in 2015 in New York.m,./
- Clearco – Clearco is an e-commerce investor that makes early-stage investments in promising, high-potential businesses. It offers a suite of performance-based financing products and services that allow online merchants to grow their businesses with significantly reduced risk. Clearco works with merchants in all stages of their journey — from start-ups to mature enterprises to create tailored financing products that allow them to grow their businesses with significantly reduced risk. Founded in 2015, the company is headquartered in Toronto, Ontario, Canada.
- Lighter Capital – Lighter Capital offers flexible funding for tech businesses with a variety of business models and stages. Lighter Capital’s team members have extensive experience in the tech industry, which makes the company a trusted partner for tech startups. Lighter Capital’s revenue-based financing is ideal for tech companies that generate revenue but do not have significant profits. It is based at Seattle,Washington and was founded in the year 2010.
- Wayflyer – Wayflyer started in 2019, with a mission to help small businesses grow faster. Wayflyer enables eCommerce businesses to grow faster by providing financing. They are creating a new financial paradigm for eCommerce. Instead of funding only the start-ups, Wayflyer supports the growth of eCommerce businesses across the board. Whether you have $50,000 or $5 million to spare, Wayflyer can help you to achieve your goals. And if you don’t have the money, they can find it for you. It’s actually based in Ireland.
So far you have come to know what revenue-based financing is and the names of some of the best revenue-based financing companies. The only thing left to decide is the type of revenue-based financing that works best for your business. To help you out with this, research has been done for you and a list of the best revenue-based financing companies is here. Depending on the type of business you own and how much revenue you need to bring in, pick the best company for you.
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