We are on a mission: Klub to invest ₹250 crores in 350 new-age consumer companies
We are on our way to making founder-friendly funding a norm in India. It is time for digital businesses & founders to raise sustainable capital without equity dilution. Read more to know about our mission for 2022.
Klub confirmed that the RBF platform will invest over ₹250 crores in nearly 350 companies in e-commerce and online consumer businesses. So far, we have funded more than 250 digital businesses including Eat.Fit, The Man Company, Tjori and SMOOR.
As a capital platform, Klub sources capital both from institutional partners and patron investors for a combination of monthly returns and social rewards. Our model of pegging revenues for capital repayment instead of equity dilution or fixed EMIs is ideal for a post-pandemic financing ecosystem. "With a robust supporting ecosystem of marketplaces, commerce, marketing and distribution platforms, we have seen multiple online-first brands recovering to pre-Covid levels, while offline brands are transitioning to online to target customers," said Anurakt Jain, co-founder & CEO, Klub.
From a funding perspective, there are currently more than 6,000 new-age brands along with over 7.5 lakh sellers on platforms such as Amazon and Flipkart, making the total addressable market size at $100 billion by 2025. Also, direct to consumer brands are not just limited to tier 1 or 2 cities as smaller cities are seeing a massive entrepreneurship explosion. However, 70% of start-ups have cash reserves to last for less than three months and 40% of start-ups have either temporarily halted operations or are in the process of shutting down, according to Nasscom. Also, traditional lenders are seeing a surge in default or arrears, especially after the pandemic that affected several small and medium scale companies.
RBF is perfectly suited for brands when the revenue profile is seasonal or uncertain as it allows them to manage their cash flows better. "Consumer brands require financing to match their growth needs that are currently unmet. But, the one-size-fits-all approach of traditional modes of equity and debt capital does not always meet the financing requirements for these brands. We aim to not only provide them access to alternative financing but also to an exclusive community where brands and investors can come together to explore and grow together more holistically," added Anurakt.
Find detailed media coverage on Economic Times and ET Retail.
