- Source: GetVantage
GetVantage is a financial technology company that provides revenue-based financing as an alternative funding solutions to small and medium-sized enterprises and startups.
History
Founded in 2019, GetVantage provides businesses with non-dilutive funding by advancing capital based on projected revenue. Businesses repay the financing through a percentage of their future revenues, aligning repayment with their cash flow. However, it limits the use of the debt to sales and marketing activities where the return on investment can be measured.
In May 2023, GetVantage obtained a license as a non-banking financial company from the Reserve Bank of India for its NBFC division, GetGrowth Capital.
Funding
The company is funded by Chiratae Ventures, Varanium, InCred, DMI, and Japanese entities such as Sony and DI.
Criticism
GetVantage's RBF-based business model has faced criticism for requiring a share of monthly revenue until a repayment multiple is reached, often resulting in higher long-term costs than fixed-interest loans, especially during strong revenue periods. For early-stage startups and SMEs with slim margins, these costs can divert funds from growth areas like product development or market expansion. The model's dependence on fluctuating revenue cycles can be challenging in India's volatile market, potentially extending repayment periods and delaying profitability. Also, India's need for a clear regulatory framework adds legal risks, exposing startups to potential disputes and unfavorable terms.
References
Further reading
Gupta, Paromita (11 March 2024). "GetVantage Launches INR 100 Cr Rise-Up Fund for Women Entrepreneurs". Entrepreneur. Retrieved 14 August 2024.
Abrar, Peerzada (24 August 2023). "Alternate financing poised to capitalise on $570 bn SME credit opportunity". Business Standard. Retrieved 15 August 2024.
Mohan, Raghu (6 July 2023). "Fintech Hop On The Licensing Bandwagon". Fortune India. Retrieved 14 August 2024.
Raghavan, Ranjani (13 March 2023). "Revenue financiers fund SVB-hit startups". Mint. Retrieved 15 August 2024.
Golikeri, Priyanka (9 December 2021). "Pledging revenues: start-ups' new funding model". Fortune India. Retrieved 14 August 2024.
Patton Power, Aunnie (29 May 2021). "GetVantage and VIWALA: Our Revenue-Based Financing Journey". Adventure Finance. Switzerland: Springer Nature. pp. 113–121. doi:10.1007/978-3-030-72428-3_11. ISBN 978-3-030-72428-3.{{cite book}}: CS1 maint: date and year (link)