Former EbixCash executive and serial entrepreneur Bhavik Vasa has launched his new venture, fintech startup GetVantage, which will make revenue-based credit available to digital businesses. The company, which has been in the works for nearly a year, also recently raised undisclosed funding from Samyakth Capital, Venture Catalysts, Astir Ventures and other angel investors from the financial sector.
Angels who have also invested in the company include Karun Arya of Oriente fintech, Vivek Awasthi of CurrenciesDirect, Ashok Goel family office, Mitesh Shah of BookMyShow, Punit Shah of Innoven Capital, along with marquee NBFCs and debt funds.
GetVantage aims to introduce a somewhat unique lending model in the Indian market.
“When you are a digital brand and most of your expense is digital marketing, that is the growth capital that everybody requires. The capital thus spent on digital marketing has a direct relation to the growth in revenues. They do not get funding from traditional lenders for this purpose. We will look at the past 12 months of marketing spend data and the relation to revenue growth to decide the customers,” Vasa told TechCircle.
The company will recover loans disbursed through a fixed share of the revenue collected by the borrower at the latter’s payment gateway. “The percentage share will be such that the credit repayment will be done in the same financial year”, Vasa said. For example, if an ecommerce firm takes a Rs 2 crore loan from GetVantage, for every transaction done on the ecommerce company’s payment gateway by a shopper, GetVantage takes a particular percentage until the loan is repaid.
The fintech firm’s credit disbursement could be between Rs 20 lakh and Rs 2 crore, and will be spent wholly on digital marketing, the company said. It will charge a flat fee of around 6% on the principal amount, but will not charge any interest or take equity in the beneficiary firm. It aims to acquire over 200 customers in the next two years.
“If the company has a large growth in revenue aided by marketing, our loan gets paid faster. Since it is a fixed fee, the customer needs to pay us only till our loan is paid and there is transparency at all stages of the credit cycle,” Vasa added.
GetVantage gives the credit in the form of Google and Facebook advertisements credit to digital firms and hence cannot be used for any purpose other than digital marketing, bringing in the financial discipline at the customers-end.
“We want to be a risk-reward partner with all the upside going to our customers. There is no dilution of equity and (it is) easy to understand. Even well-funded companies will need a sudden surge of seasonal ad spending according to their demand cycle and this can be like a bridge round. Most traditional credit, including those of modern digital NBFC (non-banking financial company) credit, won’t happen so fast. We are bringing one more option to the table,” Vasa said.
He said that the long-term vision of the company was to garner small digital businesses data. “Amazon knows everything about its sellers. Google, Facebook and Instagram don’t. Our platform will have that valuable data,” Vasa said.
This is Vasa’s second venture after Radical Payments Solutions, which was acqui-hired by ItzCash in August 2011 within two years of its launch. ItzCash, in turn, was acquired by Nasdaq-listed Ebix in 2017 for $120 million.
Vasa has teamed up with former Brand Capital executive Akash Mehta, who will head the business development and alternative investments team, and Amit Srivastava, who previously worked at AquaPay, will be the head of technology and operations.
Vasa served as the chief growth officer of EbixCash and quit the company after a seven-year stint. He had told TechCircle that he was taking a paternity break, after which he intended to launch another startup With GetVantage, he is looking to follow the non-equity and non-debt model of global startups such as Clearbanc, Lighter Capital and RevUp Capital, which look at revenue-based funding and collection.