THE FUTURE OF REVENUE-BASD FUNDING

1. THE FUTURE OF REVENUE-BASD FUNDING

2. The moment has arrived for India to embrace the revenue-based finance revolution. Founders and startup business owners around the world are embracing this non-dilutive funding strategy, and investors are also persuaded. Investors have invested more than 400 million in revenue-based lending firms worldwide just in the first six months of this year. Although revenue-based finance in India is still in its infancy, the timing couldn't be better. Although revenue-based financing is still in its infancy in India, the time could not be more ideal. Over 800 modern firms that adopted a direct-to-consumer strategy and developed themselves as dependable eCommerce companies now call the nation home. The number of eCommerce firms has increased dramatically over the past 18 to 24 months as millions of SMEs and dozens of new, interesting direct-to-consumer (D2C) brands throughout the nation have gone online.

3. Business owners used to power recurring sales development by deploying the most expensive type of business capital (equity). But as business owners all across the world, including in India, embrace the revenue-based finance revolution, this is swiftly changing. Fintechs are rapidly changing the venture capital environment by utilising revenue as a metric of success and as a tool. What precisely is RBF, then? Simply put, Revenue Based Funding is a new funding solution that is uncomplicated, a lot quicker, impartial, and data-driven. RBF is designed as a founder-friendly alternative to traditional venture capital, allowing creators to obtain money without losing control of their business, giving up board seats, or diluting their stock. For quick, clear, and simple access to funding, a business only pledges a modest portion of its future income. It is a very effective method of obtaining money since it enables founders to expand their companies without having to go through the arduous and time-consuming process of acquiring money. Unlike other funding methods, Revenue Based Funding guarantees no stock dilution and does not demand collateral, which is a requirement when working with venture capital or private equity. Founders receive expansion money while still maintaining total control over their businesses. This is crucial to grasp for business owners who are pursuing their aspirations and higher valuations. With equity or risk capital, you have a far longer time horizon, and the more successful your business becomes, the more you continually lose ownership and control of it. RBF has proliferated in a variety of ways, with players investing in traditional or offline businesses and ground-breaking tech firms employing an all-digital,

4. data-driven strategy to push investment into gaming, eCommerce, and SaaS enterprises. Why is India such a significant market for RBF? India boasts the third-largest start-up ecosystem in the world, and this does not even include the millions of SMEs that are just beginning their digital transformation. Only India's D2C business would be worth $100 billion by 2025. Due to several criteria, start-ups are most suited for RBF. First off, RBF platforms are willing to lend amounts of as little as 5 lakh rupees and as much as 5 crore rupees for a charge of 4 to 8 per cent, depending on certain criteria. Second, the prompt distribution enables these projects to obtain funding when it is required. The third is the transparency of understanding just how much of your income will be needed to pay off your debt in a given number of months. Last but not least, certain platforms are employing a data-driven strategy that bases financing decisions not on who you know but rather on the success and underlying principles of the firm. Months might pass during a normal round of fundraising from VC or PE players, which could make or break a startup hoping for immediate access to expansion money. For more established enterprises, a short funding delay would not be a problem, but for smaller ones, it can be disastrous. Months might pass during a normal round of fundraising from VC or PE players, which could make or break a startup hoping for immediate access to expansion money. For more established enterprises, a short funding delay would not be a problem, but for smaller ones, it can be disastrous. However, the D2C market in India is booming and has experienced tremendous development as a result of the viral outbreak, providing RBF with its greatest chance

5. for expansion. D2C has tremendous growth in the year 2021, with more than 85%. For the direct-to-consumer market, the epidemic has been a blessing in disguise, and several companies are considering growing. The ecosystem will be healthier the more these enterprises use RBF to spur development, yet the owners will still have total control over their companies. RBF in India has a bright future and a lot of possibilities. RBF may be the additional catalyst India's start-up ecosystem needs to recover from COVID as a founder-friendly option that puts income first. Parallel Cap funding Looking forward to the situation Parallel Cap thinks that Revenue Based Financing is the best way of funding any startup companies in future. It is Non-Dilutive and Flexible for any online startup company in future.