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Klub to invest Rs 250Cr in 350 emerging consumer companies

Fintech platform, Klub, which offers revenue-based financing (RBF) announced that it will invest over Rs 250 crore in nearly 350 companies in e-commerce and online consumer businesses. To date, the company has funded over 55 digital-first businesses including Eat.Fit, The Man Company, Tjori, and Healthy Cravings.

As a hybrid marketplace, Klub accumulates capital both from institutional partners and individuals for monthly returns and social rewards. The company said its model of taking revenue share as returns instead of equity dilution or fixed EMIs, makes it fitting for a post-Covid 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 at Klub.

From a funding perspective, there are at present over 6,000 new-age brands along with over 7.5 lakh sellers on the platforms such as Amazon and Flipkart, taking the total addressable market size to $100 billion by 2025. Also, D2C brands are not just restricted to tier 1 or 2 cities as smaller cities are witnessing a huge entrepreneurship hike.

However, 70% of start-ups have cash reserves to last for under three months and 40% of start-ups have either temporarily suspended operations or are in the process of shutting down, according to Nasscom. Also, conventional lenders are recording a hike in default or arrears especially after the covid-induced lockdown that affected several small and medium scale companies.

Klub said the RBF model is particularly suited for brands when the revenue profile is seasonal or unpredictable as it enables 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,”

The company has two offerings, Klub Blaze, which is a short-term product ranging from 3 to 9 months with an amount starting from 2 lakhs up to 25 lakhs, and Klub Gro, a long-term product for 12 to 18 months with funding of 25 lakhs up to 5 crores in a single investment.

The emerging consumer companies in the Indian market will be looking at huge opportunities to grow their business if they are among the 350 companies receiving the funds.

Shishir Gupta, Founder and CEO, StartupLanes

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