Hyderabad: Indian Angel Network in partnership with Indifi Technologies has announced the launch of a Growth Stage Debt Fund to help IAN portfolio companies get working capital. Indifi Technologies, an online lending platform, has designed this initiative that aims to provide growth debt capital to support startups to pull through the slowing economy and continue their business operations.
Through this fund, startups will be able to avail debt in the range of Rs 10 lakh to Rs 2 crore based on the revenue pattern of the business and will benefit startups with no equity dilution or other equity-related rights for the lender. Depending on product structure and the growth periodicity of business, loan repayment duration will range between 18-36 months.
Indifi Technologies CEO and MD Alok Mittal said, “The idea behind this partnership is to create a support system aimed at accelerating the growth trajectory of new-age start-ups looking to adapt and excel during these difficult times.”
Meanwhile, IAN co-founder Padmaja Ruparel said that many startups with a sound business model were struggling to keep up with their working capital needs due to a sudden impact on their business induced by Covid-19. “We felt there was a requirement of a financial facility that addressed the needs of startups that did not want to dilute their equity at the moment,” she said.
The debt fund will provide support to startups in the business of Saas, direct-to-consumer online brands, enterprise services, edtech, digital media/advertising-driven businesses, and leasing businesses. Among other criteria, startups in the B2B business applying for a loan should have minimum recurring revenue of over Rs 10 lakh per month and those in the B2C space should have recurring revenue of over Rs 5 lakh a month. The eligible startups should also have at least 12 months of stable revenue history and the sanctioned amount of loan would be equivalent to 2-4X of monthly revenue, depending upon the margin profile of the business.
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