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 2 years ago    

Revenue-based financing or Royalty based financing is a form of financing provided to small or growing businesses in which investors inject capital into a business in return for a fixed percentage of ongoing gross revenues. The firms pledge a certain percentage of future ongoing revenues in exchange for money invested. Pioneered by venture capitalist Arthur Fox in 1992, has today become an indispensable part of the private equity and early-stage venture capital investment industry. 

Started out as a passion project after analyzing the existing problems in the traditional investment structures, Anurakt Jain and Ishita Verma founded Klub, a revenue-based financing startup in 2019. Being a Sequoia Surge Startup, the fin-tech raised $2 Million in a pre-seed funding round led by Sequoia Surge, with participation from EMVC Fintech Fund, Better Capital, Tracxn Labs, and 9Unicorns, and a marquee line of angel investors including Naveen Tewari and Piyush Shah of InMobi, Kunal Shah of Cred, Rajesh Yabaji of Blackbuck, Ramakant Sharma of Livspace, and Amit Gupta of Yulu among others. Recently on 17th August 2021, Klub announced raising $20 Million in its Seed funding round and saw participation from new investors Alter Global (US), GMO VenturePartners (Japan) besides existing investors 9Unicorns, Surge. The investment round was represented by Wadhwa Law Offices. 

Klub offers flexible growth capital ranging between ₹2 lakh to ₹30 crore to digital brands & SMEs for their recurring marketing, inventory & capital expenditures without any equity dilution or personal guarantees. The Revenue or Royalty-based financing model allows companies & brands to raise capital without any dilution of their equity through venture capital or debt financing rounds, but instead, Klub allows the repayment of the capital through a fixed percentage of future revenues. Klub utilizes data-driven analytics to drive faster funding decisions and ensures that the cost of capital reflects the risk inherent in businesses across different stages and sectors appropriately. Speaking about the funding, Jain, Co-Founder & CEO, Klub said, “The digital revolution in India has leveled the playing field for local businesses, and we are thrilled to have a front-row seat in this multi-trillion-dollar opportunity. India’s digital commerce ecosystem requires more than ‘one size fits all’ financing, and with this round, we can further our mission of enabling growth for loved brands.” 

The Bangalore-based startup aims to utilize the latest funds towards expanding its team, accelerating the development of its technology and data platform as well as expanding its product offerings & market occupancy. Over the next few quarters, Klub intends to deploy Rs. 500 crore in local brands & digital SMEs. India over the last year (2020-2021) has seen a massive shift from offline to digital, and Klub has seen over 500 businesses exploring the option of funding through the platform. Commenting on their investment, Dr. Apoorva Ranjan Sharma, Co-Founder & President, 9Unicorns said, “Klub is the clear market leader in India with its platform approach & deep data-driven risk analytics. We are extremely bullish on revenue-based financing and as early backers, we are proud to see Klub quickly become the market leader. At 9Unicorns, our investment thesis is designed to be founder-first and back products that work for both small and large businesses, and have a value proposition for Tier ⅔ India. In Klub, we found the perfect mix.” Ryu Muramatsu, Founding Partner & Director, GMO Venture Partners said, “The unprecedented phase has opened the doors for locally loved brands to be visible to a global audience by accelerating digital shifts in technologies and behaviors. However, we still see a significant credit gap arising from the inability of traditional capital sources to underwrite and provide sufficient support to foster this momentum. To solve this massive problem, GMO Venture Partners is very excited and honored to be partnering with Klub to expand its engaged community as the leading revenue-based financing platform.”

Find out more about them through their website. #VocalforLocal.



I am an avid reader and have a passion for writing. Being a law student coming from a commerce background, I have a flair for learning about the dynamic legal and business fraternity, as well as becoming an entrepreneur myself. Innovation, creativity, and hard work are the sole drivers to growth and is my mantra for life.


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