Lack of capital and cash flow remains a major concern for most small businesses. In fact, it ranked first on the list of top challenges faced by small business owners in Guidant Financial’s 2020 Small Business Trends survey. Many small business owners are turning to a business credit line to address their funding needs.

What is a line of credit?

A line of credit is a way for businesses and individuals to borrow the funds they need to make purchases and pay bills or other expenses, such as employee salaries. The line of credit on a business credit card can also be used as a cash advance.

All lines of credit have a limit set by the bank, credit union or other financial entity that provides them. The limit is flexible, and the bank may be willing to increase it, depending on factors like the financial health of your business and whether you make scheduled repayments on time.

A line of credit can be either secured – i.e., backed by collateral such as a building or home – or unsecured. With this type of financing, you only pay back what you borrow, plus interest on the credit you’ve used. This is the key difference between a credit line and a small business loan. [Read related article: Unsecured vs. Secured Business Loans]

What are the different types of lines of credit?

Lines of credit fall into the following four categories.

1. Business line of credit

You’re more likely to be granted a business line of credit if your organization has a positive payment and credit history and can demonstrate that it has the income to repay the money. This type of financing gives you access to funds for any business-related expenses.

Some lenders that extend lines of credit require a business asset, like an office building or piece of machinery, to serve as collateral for the line. Secured business lines of credit typically carry lower interest rates than unsecured lines.

2. Business credit card with a revolving line of credit

A business credit card may be the place to start if your business is new and can’t yet meet the requirements for a business line of credit from a bank.

In addition to allowing you to charge purchases up to a certain limit, a business credit card generally gives you the option of taking a cash advance. Some cards have lower cash advance limits than the regular credit line on the card, though.

3. Personal line of credit

This type of financing provides access to funds for personal use. Some people open a personal line of credit to have on hand for emergencies. Others do so for a specific purpose, like buying a home, paying for a wedding or financing a child’s education. A personal line of credit can be secured or unsecured.

4. Home equity line of credit (HELOC)

Homeowners who have amassed equity in their property may qualify for this type of financing.

Equity is the difference between the market value of the home and any liens or mortgages currently outstanding on it. For instance, if your home is worth $400,000 and your outstanding mortgage is $250,000, the equity in that home is $150,000.

Homeowners use HELOCs for various purposes, such as remodeling or renovating a home, financing a child’s college education, buying a car, or purchasing a second home or other real estate. Some people turn to a HELOC when they need to pay off credit card debt or other personal loans.

How does a revolving line of credit on a business credit card work?

A revolving line of credit on a business credit card “renews” continuously. As you pay down or pay off your outstanding balance, your credit line increases up to the limit set by the bank that issued it.

For example, say you open a business credit card account with a $25,000 line of revolving credit. Days later, you use it to buy $3,000 worth of supplies for your business, leaving $22,000 available. If you paid the bill in full the following month, your line of available business credit on the card would once again be $25,000. If you paid it in monthly increments, your available funds for purchases or cash advances would increase by that amount until they reach $25,000.

Your bank will charge interest on your unpaid balance. According to U.S. News, the average annual percentage rate (APR) on business credit cards ranges from 14.22% to 22.18%.

If you take out a cash advance, you’ll pay a higher APR plus a cash advance fee, which may be either a percentage of the funds advanced (usually 2% to 5%) or a flat fee (usually $10 to $15), whichever is more money.

What are the differences between a business credit card and a business line of credit?

A business credit card and a business line of credit may seem similar, but keep in mind these four differences between the two.

1. Funding limits

Available credit on a business credit card usually doesn’t exceed $50,000. With a business line of credit, that sum can be as high as $250,000.

2. Cost of cash advances

Card-issuing banks charge a fee and a higher interest rate for cash advances than what you pay when using the card for purchases. These higher rates and fees don’t come into play when you opt for a business line of credit.

3. Repayment flexibility

A business credit card offers a flexible repayment schedule, allowing you to choose how much of your balance you repay each month, while a business line of credit has a set end date and a fixed repayment schedule spanning six months to three years.

4. Trade-off between fees and rewards

Most banks have a business credit card rewards program. The trade-off is that most business credit cards have an annual fee, which covers the cost of the perks the bank offers in connection with the program.

By contrast, a business line of credit doesn’t come with rewards, but it also doesn’t carry annual fees.

When should you use a revolving line of credit on a business credit card?

Tapping into a line of credit on a business credit card is preferable to taking out a small business loan for paying ongoing expenses or making a purchase that will be paid off in just a few months, according to Michael Hammelburger, CEO of Expense Reduction Group.

A business credit card also works well in the case of an emergency that you don’t have the cash reserves to cover. For example, if the vehicle you drive for business needs repairs after an accident but you can’t wait for the insurance payment to get the work done, a business credit card would be a convenient way to pay for that expense.

Hammelburger said a business credit card is not the right option for refinancing an existing debt, buying real estate or making any other type of large investment. A small business loan or business line of credit is a better bet here, primarily because it usually offers a larger sum of money than would be available on your business credit card.

Brian Cairns, founder of ProStrategix Consulting, agreed, adding that a business credit card should not be your first choice for funding your business because even the best credit cards have high interest rates. Occasionally plunking down such a card for a big-ticket item when finances are tight is OK, but only if you can pay off that item rapidly.

Hammelburger also advised against paying personal expenses with a business credit card. “If you do that, separating business expenses from personal ones at tax time is difficult, and I’ve seen it become a real nightmare. If you make a mistake, it could be a red flag for an audit.”

What other financing options exist for small businesses?

In addition to a business credit line or a business credit card with a revolving credit line, you may be considering a small business loan. Here are some of the ways a business credit card differs from a small business loan.

1. Application process

Qualifying for a business credit card is faster and easier than getting a small business loan. Loan applications are more involved, as banks want assurance that your business will be able to repay them. In general, they look for a good debt-to-income ratio (with minimal existing debt) and a track record of at least two years in business, among other qualifications.

2. Convenience and flexibility

Accessing funds from a small business loan often takes several weeks. You receive the lump sum upfront, whether or not you need the funds in their entirety, and pay interest on the full amount of the loan.

With a business credit card in hand, you can immediately charge purchases or access cash, and you only pay back what you’ve borrowed (with interest, if applicable).

3. Rewards and incentives

Depending on the issuing bank, you may receive a sign-up bonus or earn airline miles, shopping discounts, dining discounts, or other perks for using your business credit card. You may also earn cash back on purchases you make with the card. Business loans don’t come with these incentives.

4. Cost of borrowing money

The interest rates on business credit cards are usually much higher than the interest rates on small business loans or fixed lines of credit from a bank. These rates can increase over time, and interest adds up very quickly if you don’t pay your bill on time and in full each month. Also, inadvertently exceeding your credit limit or paying your bill late can incur fees and penalties that put a big financial strain on your business.

Business loans have lower interest rates, but again, you’re paying them for the full amount of the loan.

Original Source: business.com

Launched in 2012, YourStory's Book Review section features over 250 titles on creativity, innovation, entrepreneurship, and digital transformation. See also our related columns The Turning Point, Techie Tuesdays, and Storybites.

Aspiring entrepreneurs and students wanting to learn about the startup journey and the role of fundraising can find a useful framework and numerous case studies in the book — Funding your Startup — by Dhruv Nath and Sushanto Mitra.

Featured founders of successful startups who raised funds are Nakul Kumar (Cashify), Samant Sikka (SQRRL), Jaineel Aga (Planet Superheroes), Abhishek Barari (MyCuteOffice), Amit Grover (AHA Taxis), and Tushar Agarwal (Uno Finance). The authors also document why some startups did not succeed, such as QACCO, Greymeter, and others, whose names have been changed.

There are brief takeaways as well from successful founders and investors like Sanjeev Bikhchandani (Naukri.com), Deep Kalra (MakeMyTrip), Yashish Dahiya (PolicyBazaar), Dinesh Agarwal (IndiaMART), Nakul Kumar (Cashify), Sairee Chahal (SHEROES), Pradeep Gupta (Indian Angel Network), and Rajul Garg (Leo Capital).

Dhruv Nath is a professor at the Management Development Institute, Gurugram. An IIT Delhi graduate, he is also an angel investor and a Director with Lead Angels. He was earlier SVP at NIIT. Sushanto Mitra is the Founder of Lead Angels. He was earlier the founding CEO of Society for Innovation and Entrepreneurship (SINE), IIT Bombay, and the Director of Hyderabad Angels.

Here are my three key clusters of takeaways from the compelling 240-page book, summarised as well in Table 1. See also my reviews of the related books Angel Investing, The Manual for Indian Startups, Straight Talk for Startups, and Startup Boards.

TaI. The PERSISTENT framework

The authors present a useful startup framework for founders, based on the apt acronym PERSISTENT: Problem, Earnings model, Risks, Size of the market, Innovation, Scalability, Team, Entry barriers, Niche, and Traction.

This framework is applied to seven startups who applied for early-stage funding, and five startups who applied for late-stage funding. The analysis covers successes and failures, both of which are instructive for aspiring founders.

Many founders fail to pass the test of one or more elements of the PERSISTENT framework. These include unit economics not becoming positive, or not exceeding overhead costs, or becoming profitable only after too long a period. Pure discounting cannot be sustained for a long time, and unless there is a moat, there is no sustainable competitive advantage.

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For example, MyCuteOffice showed the viability of the shared-office model in Mumbai and raised Rs 70 lakh in angel funding. The startup reduced the risks of tenants and landlords bypassing the platform and reduced manual interventions by adding ranking and rating features.

It then added a new model of affordable co-working spaces. Founder Abhishek Barari got the idea for the startup while hearing friends complain about office costs. He advises entrepreneurs to keep 50 percent of funds in reserve for difficult times.

Samant Sikka got the idea for micro-savings startup SQRRL while literally watching squirrels storing nuts for a rainier day. He expanded to goal-based saving, thus showing the scalability of the model. Showing skin in the game, he was able to get funds straight from VCs, skipping the angel stage.

He cautions founders that fundraising can take up a lot of time and even draw them away from the core business. The authors also caution that a model based on “get users first then revenues later” will be harder to pitch to investors.

Greymeter began as a platform for assessing and training college graduates for the job market and raised a crore in angel funding. But, it had to shut shop because some assumptions that large companies would pay for testing and training of coding skills did not hold to be true; they conducted such activities themselves.

Another founding team that the authors came across did not make it past the angel round because the founders had only an engineering background and no business orientation. It does not help to have only a love for the product without business sense, the authors caution.

Yet another founder tried to replicate the online wedding gift registry model from the west to India. Though it was a significant niche and solved the problem of unwanted or duplicate wedding gifts, there were risks such as low entry barriers for ecommerce giants.

A founder tried to pitch her business for fashion discussions, ratings, and shopping via social media, but angels did not invest in it since it had no revenue model. Perhaps a super-angel willing to wait longer for a revenue model to emerge could have invested in it, the authors explain.

The authors document how another proposal not accepted by angels was for a sharing platform for toppers’ notes among non-topper students. Though the idea seemed good for this large market, there were concerns over the quality of notes, unauthorised sharing, and ineffective rating of notes.

Dissatisfied with his day job in an equity firm, Jaineel Aga zeroed in on the market need for official merchandise for comic characters and founded Planet Superheroes. But up-front licensing costs were high, and there were cheaper alternatives by pavement sellers.

There was market demand, however, for quality products, and he raised Rs 3 crore from angels and Singapore-based VC DSG Consumer Partners. He moved from online sales to ‘shop in shops,’ exclusive outlets, and franchises. A Japanese gaming company participated in a Series A round next.

The founders of Cashify hit upon the idea of recycling e-waste when they were disposing of empty beer bottles. They refurbished laptops acquired directly from customers instead of buying them from unorganised markets, and moved on to mobiles.

Though angels and VCs initially turned down their funding requests over concerns of being too operations-heavy, they focussed on becoming profitable, though at a slower pace. The VCs then came back, and Cashify raised half a million dollars for its growth plans. The startup makes its own brand of refurbished devices (Phone Pro and Screen Pro) and has 14 hubs in India.

Amit Grover hit upon the idea of one-way fare inter-city taxis when he was forced to go with a two-way booking based on the prevailing model. He founded aggregator AHA Taxis by working with local operators and added an automation moat via analytics for calculating prices, rating of services by passengers, and a bidding system for operators.

Though the first set of angels turned down the startup, the second set invested in the first round. Interestingly, the first set invested in the second round, and the startup was acquired as a strategic investment by US-based eBix Software (it also acquired Yatra.com).

“Keep on building your business and the investors will come,” Amit advises.

Tushar Agarwal’s friend had personal struggles with getting financing for his father’s hospitalisation expenses. Building on his own experience in the finance and health sectors, Tushar founded Uno Finance.

He partnered with hospitals for on-premise marketing and commission rates, and built a risk analytics model based on medical research. The second round of funding helped in further growth.

QACCO (Quality Accommodation) was founded as an aggregator for boutique hotels. Though it raised angel funding, it shut down because of the limited and saturated market. There was also no entry barrier against larger players, the authors explain.

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II. Foundations of funding

Early funding can come from friends and family – usually, because they know the founder, see some promise in their idea, and are willing to take a risk. Angel investors fund startups with the hope of getting better returns than deposits (around seven percent) or stock markets (around 15 percent), the authors explain.

Such investors operate in angel networks, which now even include aam aadmi angel investors who invest smaller amounts like Rs 5 lakh each, as compared to super angels. “Angels invest their own money, whereas VCs typically invest other people’s money,” the authors explain.

VCs invest in late-stage startups (where the business is proven and risks are lower), to the tune of Rs 5-7 crore or more. There are also “micro VCs” such as Blume Ventures, India Quotient, and YourNest Venture Capital. VCs want to see hard numbers and actual results, not just hope and promise; they want to see past performance and not just future projections.

Good investors bring in funding, experience, mentorship, contacts, and credibility. This helps startups build products or grow rapidly. “Don’t chase funding. Build a successful business, and let funding chase you,” the authors emphasise.

Other sources of funding are debts or loans, government grants, and business plan competition prizes. Incubators and accelerators provide funding, as well as access to infrastructure, mentoring, investor connections, and services like patent filing (see YourStory's Startup Hatch series of incubator and accelerator profiles).

Angel networks can be contacted via the city hubs of The Indus Entrepreneurs (TiE), or during demo days of incubators and accelerators. Meetings with angels are in groups, whereas VC meetings are one-on-one.

The authors provide tips on preparing business plans and pitches. The pitch should reinforce the key message of the startup in one phrase, line, or sentence. The structure of the pitch deck can be along the PERSISTENT framework elements, along with information on competition and projections.

Investors may expect to see positive unit economics within a couple of years, and profitability after four years, and accordingly, allot funds in tranches. Founders may ask for a crore in funding to prove the business model, and Rs 2-3 crore for the first phase followed by Rs 7-10 crore for the second phase of growth.

Growth is expected to be rapid and move away from discounting in early periods. “Remember, funding is generally given for growth, and not for survival,” the authors caution. The pitch should explain burn rates and runway periods.

Two chapters cover valuation, term sheets, shareholder agreements, and steps like due diligence. The 12-page appendix provides a sample term sheet; shareholder agreements can be 40 pages long.

Based on thumb rules, the pre-money valuation of a startup can vary from Rs 4-15 crore, depending on revenues. The authors advise founders to read up thoroughly and even get legal help to understand contracts, director rights, board functioning, preference shares, liquidation preferences, right of refusal, buy-back, drag-along rights, and co-sales (tag-along rights).

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III. Expert tips

The book also includes funding tips from seven experts. For example, the COVID-19 pandemic will weed out fragile startups, according to Sanjeev Bikhchandani, Founder of Naukri.com. “Build a solid business, and valuations will follow,” he advises.

“Companies that either get too much money or get it too easily tend to use it suboptimally,” he cautions. Great entrepreneurs will be able to bounce back from failure and raise funds again. “In the final analysis, your reputation is your only asset,” he explains.

Funding is needed to build products and B2C brands quickly, explains Deep Kalra, Founder of MakeMyTrip. Besides, B2B sales cycles can be quite long. Founders should have conviction in the business, and also be willing to pivot when necessary during the tough and frustrating journey.

Investing is a “relay race” between successive waves of entering and existing investors, according to Yashish Dahiya, Founder of PolicyBazaar. He cautions founders not to try “financial jugglery” to fool or lie to investors.

“Creating a business is a long, long process. Just to build an effective moat – or entry barrier – you’ll perhaps take ten years,” he explains.

“All businesses don’t have to be billion-dollar businesses,” says Dinesh Agarwal, Founder of IndiaMART. “The often-used phrase, ‘Go big or go home,’ is definitely not valid,” he adds.

The passion and quality of the team will help the founders win. Funding is not always necessary, despite the media hype and press pressure, he cautions. “In fact, lots of businesses have suffered because of excessive funding,” Dinesh says.

“There must be an alignment of thought between the investor and the entrepreneur, and there must be value-add from the investor – not just the money,” advises Pradeep Gupta, Founder of the Indian Angel Network. He also cautions against founders coming across as “smooth-talkers, smart alecs, braggers without substance, or poor listeners.”

Founders should think of funding in advance, and not just when the need is immediate, advises Sairee Chahal, Founder of SHEROES. She also cautions founders against investors looking only for quick exits, who may put unnecessary pressure on a founder.

“Clarity of thought, the presence of a strong vision, as well as a detailed plan, and the execution ability to take the company there is critical,” according to Rajul Garg, Founder of Leo Capital India Advisors.

The road ahead

Each chapter ends with some discussion on the COVID-19 impact on different startups and sectors. For example, startups in healthcare, education, skill enhancement, e-entertainment, insurance, and ecommerce may do well, but those in travel and tourism will be hard hit.

Companies may have to switch from growth mode to survival mode, and drastically shift from fixed costs to variable cost structures, the authors advise.

In sum, this is a must-read book for aspiring founders and entrepreneurs. The book provides a wealth of insights in an engaging storytelling format. There is also lots of humour, such as references to the power of coffee to help plan, and the power of beer to help dream during brainstorming sessions!

Edited by Suman Singh

India’s most prolific entrepreneurship conference TechSparks is back! With it comes an opportunity for early-stage startups to scale and succeed. Apply for Tech30 and get a chance to get funding of up to Rs 50 lakh and pitch to top investors live online.

Original Source: yourstory.com

Even as the coronavirus pandemic caused investors to become risk-averse, Indian startups continued to raise funding. However, the deal sizes shrank, pointing to the fact that investors put in less money in more startups to spread their risks.

Delhi-NCR, Bengaluru, and Mumbai retained their top spots in terms of the number of deals and funding raised. YourStory Research data revealed that the number of funding deals closed by Mumbai-based startups jumped about 20 percent to 79 in the first six months of 2020, up from 66 deals in H1 2019.

According to data accessed by YourStory, 69 deals were closed by Mumbai-based startups since the nationwide lockdown, announced at the end of March.

funding, startup

Image Source: Shutterstock

Here are the top 10 funding deals by Mumbai-based startups funding during the lockdown. (We have considered deals that were closed since March 25)

InCredInCred

Bhupinder Singh, Founder and CEO, InCred.

In July, NBFC InCred raised Rs 500 crore in debt funding from various public sector banks and public financial institutions.

The latest round of financing will boost the startup’s lending expansion across select segments in the consumer, education, and MSME markets.

Founded in 2016 by Bhupinder Singh, InCred started its operations with consumer lending in March 2016. It then diversified into small business lending in March 2017. At present, it claims to have a loan book of over Rs 2,000 crore. 

In April 2019, the digital lending platform had raised Rs 600 crore in its Series A round, led by Dutch development finance institution FMO.

Also Read[Funding Alert] NBFC InCred raises Rs 600 Cr in Series ARebel Foods

In April 2020, cloud kitchen operator Rebel Foods raised $50 million from existing investor US-based hedge fund Coatue Management, according to its filings with the Registrar of Companies.

Founded by Jaydeep Barman and Kallol Banerjee in 2010, Rebel Foods has overseas operations in Southeast Asia and Europe. Globally, it runs 325 cloud kitchens.

Earlier this February, the startup had raised additional venture debt of Rs 35 crore led by debt funding firm Alteria Capital.

Also Read[Funding alert] Faasos' parent Rebel Foods raises venture debt of Rs 35 Cr led by Alteria Capital TopprZishaan Hyath, CEO and Founder, Toppr

Zishaan Hayath, CEO and Founder, Toppr

In July, edtech startup Toppr raised Rs 350 crore in Series D round, led by Foundation Holdings, with participation from existing investors, including Kaizen Private Equity.

Toppr will use this latest investment to further help to develop the artificial intelligence (AI) based Toppr School Operating System (OS), a platform for schools to run digitally unifying in-school and after-school learning to create a standardised and personalised experience.

Founded in 2013 by Zishaan Hayath, the startup has cumulatively raised Rs 700 crore to date.

Also Read[Startup Bharat] How these IITians turned their student project into a profitable global edtech company CarTrade

In June, online automobile classifieds platform CarTrade raised Rs 321 crore ($42.5 million) from two of its existing investors in its Series H round of financing.

Earlier in 2017, the firm had raised Rs 370 crore in a funding round led by Temasek Holdings and a US family office.

Founded in 2006 by Vinay Sanghi, the portal also offers car price information, certification, insurance, used car finance, comparisons, on-road prices, and reviews. In November 2015, the platform acquired CarWale, an online classifieds portal, in an all-cash deal.

LEAD SchoolLead School founders

LEAD School co-founders: Smita Deorah (left) and Sumeet Mehta

In August, edtech startup LEAD School raised $28 million in a Series C round, led by Westbridge Capital along with existing investor Elevar Equity.

This round of funding will be used by the company to accelerate the development and rollout of new product offerings, increase its school network in Tier II and III cities, and hire talent across domains. 

Founded in 2012 by Sumeet Mehta and Smita Deorah, LEAD School combines technology, curriculum, and pedagogy into an integrated system of teaching and learning to create affordable private schools. It has partnered with 800-plus schools with an estimated three lakh-plus students in more than 300 cities in 15 states.

Also Read[Funding alert] LEAD School raises $28M in Series C round led by Westbridge CapitalNykaaNykaa

Falguni Nayar, Founder & CEO, Nykaa with Nihir Parikh, Chief Business Officer (2nd row, 3rd from L-R)

Online beauty turned omnichannel lifestyle retailer Nykaa raised three rounds of funding adding to $24.7 million. In June, the startup raised Rs 19.6 crore from Sunil Kant Munjal as part of its ongoing round.

In May, it raised Rs 66.64 crore from its existing primary investor Steadview Capital. With this round of investment, Nykaa became valued at $1.2 billion, thus entering the startup unicorn club.

Earlier in March, it raised Rs 100 crore from its existing primary investor Steadview Capital. This came after it had raised an additional Rs 100 crore from Singapore-based TPG Growth IV SF last year.

Prior to that, in September 2018, Nykaa raised Rs 113 crore from Lighthouse India Fund III, and another Rs 160 crore through primary and secondary share sales.

Since its launch in 2012 by Falguni Nayar (former Managing Director at Kotak Mahindra Capital), Nykaa has been instrumental in shaping the beauty and lifestyle industry in India through its omnichannel reach and curated product offering.KettoKunal Kapoor

Actor and Co-founder of Ketto, Kunal Kapoor

In July, Ketto — a crowdfunding platform for fundraising of social, creative, and personal causes — raised Rs 109 crore to help and support more than three lakh people in various capacities.

Founded in 2012 by Bollywood actor Kunal Kapoor along with Varun Sheth and Zaheer Adenwala, Ketto has been distributing PPE kits and ration kits, and providing support to migrant workers. It has established community kitchens to feed hundreds of people every day.

Earlier this year, Ketto raised Rs 30 crore in crowdfunding through the philanthropy arm of CleverTap, CleaverTap4Good.

Also Read[Funding alert] Kunal Kapoor's crowdfunding platform Ketto raises Rs 109 Cr amidst the pandemicServifysreevathsa

Sreevathsa Prabhakar, Founder, Servify

In June, Service Lee Technologies which operates device management and support platform Servify, raised $11.37 million in its Series C round from a clutch of existing investors.

Earlier, in April, it secured Rs 1.9 crore in debt from Germany-based Barkawi.

Launched in 2015 by Sreevathsa Prabhakar, Servify is an app-based customer support service channel for consumer electronics.

In three years, it has created a complete service life cycle management platform enabling top electronics and smartphone brands, carriers and retailers in device diagnostics with distribution, sales, warranty management, after-sales service, end of life management, and ecommerce capabilities.

Also ReadWith 740 million devices on its platform, Servify is India’s king of after-sales experienceLido LearningLido

Team Lido

In April, Lido Learning, an edtech startup that focuses on live online tutorials, closed a $7.5 million Series B round led by Ant Financial-backed BAce Capital. This put the edtech startup’s overall funding at $10.5 million.

With this round of funding, Lido plans to build a presence in Tier II and III towns to democratise high quality education across India. It will also expand into more curriculum-focused subjects, and 21st-century skills like analytical thinking, critical reasoning, communication, collaboration, and creativity.

Earlier in March, it raised another $3 million led by Picus Capital backed by Rocket Internet Founder Alex Samwer, and President of Paytm Madhur Deora.

Founded in 2019 by Sahil Sheth, Lido Learning offers live tutoring and personalised online coaching sessions to students from Class V-Class IX in Math and Sciences from both CBSE and ICSE boards.

Also ReadEdtech startup Lido Learning to hire senior citizens as tutors during coronavirus Suryoday

In May, scheduled commercial bank Suryoday Small Finance Bank (SSFB) raised Rs 62.14 crore from existing investors including Gaja Capital, Kotak Life, Lok Capital, TIAA, and Kiran Vyapar. 

SSFB, which provides microfinance loans to customers, has launched a working capital loan product for its MFI customers to meet their urgent liquidity requirements during the lockdown.

The bank has over 20 institutional investors with a healthy mix of institutional investors, development funds and private equity investors.

(With inputs from Sujata Sangwan, Thimmaya Poojary, Debolina Biswas, Sindhu Kashyap)

(Edited by Saheli Sen Gupta)

Want to make your startup journey smooth? YS Education brings a comprehensive Funding Course, where you also get a chance to pitch your business plan to top investors. Click here to know more.

Original Source: yourstory.com

New Delhi-based microfinance startup SATYA MicroCapital Limited has announced that it has raised Rs 72.5 crore led by Swiss impact investor, BlueOrchard Finance Limited, for the second time since its inception in 2017.

According to a release by the company, the funding will be received through InsuResilience Investment Fund (IIF) and Japan ASEAN Women Empowerment Fund (JAWEF), which is managed by BlueOrchard.

The company said the debt funding will instil a boost in scaling up its operational base while continuing to develop innovative credit offerings and complete end-to-end business processes for its valuable clients.Funding

Source: Shutterstock

Also Read[Funding alert] Electric vehicle startup Simple Energy in talks to raise $1M

SATYA MicroCapital, an NBFC-MFI, offers collateral-free credit to micro enterprises on the basis of a credit assessment platform and a centralised approval system. The company said it has adopted a unique Limited Liability Group (LLG) model for extending loans and ensuring repayment. The model distributes the liability among each group member, which exists only up to 10 installments in bi-weekly collections.

Till date, SATYA claims to have rendered its value-added credit services for generating means of livelihood to over 4.5 lakh clients across 15,000+ villages across the country.

Vivek Tiwari, MD and CEO, SATYA MicroCapital Limited, said,

"The funds will be used for effectively promoting animal husbandry bundled with livestock insurance and in helping a wider section of small aspiring women entrepreneurs to normalise their business. We are thankful to BlueOrchard Finance for showing trust and confidence in SATYA. This will definitely boost the microfinance activities in India.”

The company was also backed by an equity funding of Rs 105 crore in May 2020 led by Japan-based finance institution Gojo & Company Inc. 

Earlier, in September 2019, SATYA MicroCapital raised Rs 50 crore in debt funding by issuing non-convertible debentures (NCDs) to Mauritius-based Aviator Global Investment Fund, in a joint venture with Northern Arc Capital, for three years.

It launched its micro-finance operations from its Bulandshahr branch in Uttar Pradesh. Since then, it has set up 65 branches across 11 states – Assam, Bihar, Chhattisgarh, Haryana, Odisha, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand, and West Bengal.

(Edited by Megha Reddy)

Want to make your startup journey smooth? YS Education brings a comprehensive Funding Course, where you also get a chance to pitch your business plan to top investors. Click here to know more.

Original Source: yourstory.com

Home-grown healthcare venture capital fund HealthQuad on Monday said it had raised Rs 514 crore in an initial funding round for its second fund, aimed at supporting disruptive, technology-based and innovation driven businesses that transform healthcare in India.

The success of the fund at a time of overwhelming negative sentiment due to the COVID-19 pandemic indicates how investors are turning towards funds that support futuristic healthcare startups and organisations creating healthcare solutions for tomorrow, HealthQuad said. FundingAlso Read[Funding alert] Parking spot reservation platform ParkSmart raises Rs 1.5Cr from ah! Ventures, Marwari Angels

The fund has been supported by some leading global investors, including Ackermans & van Haaren (AvH), Teachers Insurance and Annuity Association of America (TIAA), Indian DFI SIDBI, Swedfund, and pharma giant Merck & Co Inc.

"We believe that the recent COVID-19 pandemic has given an impetus to the digital transformation of healthcare. HealthQuad is committed towards creating an ecosystem of such category-defining companies that improve accessibility and affordability, and elevate overall healthcare standards in India," HealthQuad Co-founder and Chief Investment Officer Charles-Antoine Janssen said.

"We are pleased to be supported by like-minded global investors to deliver transformative impact beyond superior financial returns," he added.

HealthQuad taps into opportunities in disruptive technology-based and innovation-driven healthcare models to unlock value and create deep social impact, the statement said.

"The pandemic has further stressed the need to leverage technology to cater to the healthcare needs of such a large population. Disruptive technological solutions have the potential to vault over some of these issues and push India towards a more robust and reliable healthcare system…," HealthQuad said.

(Disclaimer: Additional background information has been added to this PTI copy for context)

(Edited by Teja Lele Desai)

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Original Source: yourstory.com