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Mint
4 days ago
- Business
- Mint
Small brands aren't holding back this festive season to beat the slump
Bengaluru: Brands that directly sell to consumers have realized that usual festive preparations won't be enough to lift them out of a demand slump this year. Ahead of the period considered auspicious for buying everything from appliances and cars to jewellery, such small and medium-sized businesses are front-loading investments in inventory and spending more on promotions than in the previous festival seasons. Much of this is aimed at stocking up for quick-commerce, one channel that has so far been immune to subdued consumption. Many brands are seeking as much as 40% more working capital this year compared to the previous year, according to Atul Khichariya, co-founder of Velocity, a platform which helps businesses sell online. Velocity offers cash flow-based loans to small and medium-sized businesses and startups to expand operations to meet seasonal rush. Last year, it earmarked ₹400 crore to support brands. 'The ticket size of loans is also on the rise, especially with quick commerce becoming a wellspring for growth. They all want to expand quickly," Khichariya said. 'The number of brands showing interest this year is also nearly 60% higher than last year." Urban spending on discretionary products from apparel to appliances has stayed subdued so far this fiscal amid global trade uncertainties. Summer sales, too, underperformed because the monsoon rains arrived early. While consumer goods makers saw a mixed first quarter ended June, there were early signs of recovery in some categories, Mint reported earlier. To build on these green shoots, brands are recalibrating their approach to the festive season, which in India typically runs from August with Raksha Bandhan and Independence Day until December and accounts for the bulk of yearly sales. Recur Club, a debt marketplace for small businesses, has seen wider categories of brands approach for capital assistance this year, led by health food and beverages and personal care companies. 'Some brands are borrowing more than double of what they did last year, thanks to quick commerce," Eklavya Gupta, founder of Recur Club, told Mint. 'We have also expanded our scope and will allocate as much as ₹200 crore towards working capital loans this year." Quick commerce wave Quick commerce continues to provide robust tailwinds to fulfil consumer demand, said Anant Vidur Puri, partner at investment firm Bessemer Venture Partners. 'The festival season provides a trigger and opportunity for consumers to further fulfil their aspirations." Ugaoo, an urban gardening brand backed by V3 Ventures and DSG Consumer Partners, plans to triple its production capacity to 6 lakh plants every month, anticipating a surge in festival gifting demand on rapid delivery platforms including Blinkit, Zepto and Swiggy Instamart. 'This is a crucial time to be available through every channel, so we've borrowed more debt this year," said Siddhant Bhalinge, founder and chief executive of Ugaoo. 'This also gives us a chance to reach tier 2 and 3 cities like Ludhiana, Indore, and Kanpur." According to Rishav Jain, managing director and co-lead (consumer, consumer tech and retail) at Alvarez & Marsal, inventory is the biggest contributor to working capital during the festival period. 'Given the sales spike, most brands and channels produce and stock in advance to avoid stock-outs," he said. 'In case of a poor season, this could potentially lead to higher inventory and hence higher future discount and returns." Online shopping portals have started reporting festive spikes in demand. Raksha Bandhan, which fell on 9 August, saw e-commerce order volumes jump 24% over the same period last year, and gross merchandise value (GMV) or the total value of products sold spiked 27%, according to estimates by e-commerce enablement platform Unicommerce. Tier 2 regions, including Jaipur, Coimbatore, and Nagpur, drove the highest order volume growth this year, it said. Lightspeed-backed Zepto reported a 30% rise in average order value on Raksha Bandhan, with order volumes surging 150% over the year-ago period, it said in a statement. 'Not the time to go slow' Many brands are also investing far more on promotional activities this year. The Baker's Dozen, an artisanal bakery chain backed by Wipro's venture capital arm, will spend the majority of its marketing budget on quick commerce, specifically around Diwali and Christmas when baked goods sell as gifting items. 'We're already seeing that our sales through quick commerce are doubling this year compared to last, so now is not the time to go slow," said Sneh Jain, co-founder and managing director of The Baker's Dozen. Simran Khara, founder and chief executive of home and hygiene products maker Koparo, said that increased marketing spends are justified during the festival period as the conversion rates are high. 'The traffic is generally very high-intent, so it's all about marketing in the right channels." Ugaoo's strategy this year is different–it will spend less on influencer marketing and more on high-impact offline marketing campaigns such as in-flight magazines and digital billboards. 'Many online avenues like influencer marketing are getting lost because people's attention spans are deteriorating," said Ugaoo's Bhalinge. 'The visibility of offline modes provides more value in the long run, especially during festive periods." According to Jain of Alvarez & Marsal, most brands have certain times of the year or properties where they invest disproportionately. 'Given the Q3 festival period is that time for many brands, most of these spends are budgeted in advance," he said. 'But most of these spend ends up being tactical /promotional in nature to generate sales, rather than awareness."
Entrepreneur
16-07-2025
- Business
- Entrepreneur
Non-Dilutive Capital Gains Ground as Equity Funding Tightens in India
As venture funding tightens, founders are increasingly tapping grants, venture debt, and revenue-based financing to extend their runway without giving up ownership Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. With equity financing becoming harder to secure in India's cooling startup ecosystem, a growing number of entrepreneurs are turning to non-dilutive capital to fuel their growth while retaining ownership. Non-dilutive capital, which often includes government grants, revenue-based financing (RBF), venture debt, and corporate-backed programs, does not require founders to part with equity. This form of capital is now gaining momentum as startups look to survive a funding winter and prioritize sustainable, capital-efficient growth. The trend is particularly pronounced in sectors such as SaaS, D2C, deeptech, and biotech, where alternative funding models offer a critical runway extension without compromising cap tables. "Non-dilutive capital today is fast, often disbursed in days, unlike equity rounds that can take months," said Eklavya Gupta, CEO & Co-Founder of Recur Club, adding that most founders still associate speed with compromise, but that's not the case anymore. "A 15-17 per cent IRR loan is significantly less costly than giving away 30-40 per cent equity. But the real unlock is strategic: when used right, modest leverage strengthens your capital structure and enhances shareholder value. Founders who understand this build more resilient and high-ownership companies," says Gupta. According to Tracxn's H1 2025 report, early-stage startup funding in India declined by 38 per cent year-on-year. Amid this slowdown, startups are increasingly pursuing capital strategies that help them avoid down rounds or over-dilution. Meanwhile, venture debt deployments stood at USD 1.2 billion in 2023, up from USD 900 million in 2022, according to data published in the IVCA-EY India Venture Capital Report 2024. When it comes to private capital in India, the story is just getting started. "We're still an under-levered economy, and we expect private capital AUM to grow aggressively over the next few years. What's really driving this shift is the changing face of entrepreneurship," said Gupta. "Direct-to-consumer brands, e-commerce players, AI and tech service companies, and even industrial automation ventures, all need faster and more flexible capital solutions that support growth without diluting ownership. These sectors are asset-light but revenue-strong, making them ideal candidates for structured, non-dilutive credit. Private capital is rising to meet that demand." Recur Club has disbursed INR 3,000 crore in non-dilutive capital so far. When it comes to state efforts, the Startup India Seed Fund Scheme (SISFS) has disbursed over INR 945 crore across more than 1,000 startups as of June 2025, according to data on the Startup India portal. Other schemes, such as BIRAC's Biotech Ignition Grant (BIG) and NIDHI's PRAYAS and EIR program have supported deeptech and healthtech founders with equity-free grants. Venture debt providers such as Trifecta Capital, Alteria Capital, and InnoVen Capital have seen continued demand from startups seeking to raise capital between equity rounds or to finance growth without diluting their equity. Ajay Hattangdi, Managing Partner at Alteria Capital had said that venture debt is evolving beyond just a bridge to being a strategic part of startup capital stacks. Despite growing interest, access to non-dilutive capital depends heavily on revenue visibility, business model, and sector, and for the providers themselves, regulatory bottlenecks. Absolutely, and it's part of the terrain. The RBI's evolving digital lending and KYC guidelines, especially around consent frameworks, data transparency, and intermediary roles, have added complexity to how lending products are structured and delivered. These rules are essential for long-term ecosystem trust, but they do slow down the process operationally if you're not built for it. "Absolutely, and it's part of the terrain. The RBI's evolving digital lending and KYC guidelines, especially around consent frameworks, data transparency, and intermediary roles, have added complexity to how lending products are structured and delivered. These rules are essential for long-term ecosystem trust, but they do slow down the process operationally if you're not built for it," added Gupta.
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Business Standard
11-06-2025
- Business
- Business Standard
Recur Club eyes early, mid-stage firms for Rs 2,000 crore FY26 bet
Recur Club plans to invest Rs 2 crore on average in early and mid-stage startups, aiming to fund 1,000 firms in FY26 through its debt marketplace platform and network of 50+ lenders premium New Delhi Listen to This Article Debt marketplace Recur Club aims to invest in nearly 1,000 startups from a capital pool of Rs 2,000 crore in the ongoing financial year, FY26. The firm plans to put in money in early to mid-stage companies, with a focus spanning sectors such as business-to-consumer (B2C), business-to-business (B2B), software-as-a-service (SaaS), and direct-to-consumer (D2C) e-commerce. Founded in 2021, Recur Club is a debt marketplace that enables companies to procure business loans from a variety of lenders on the platform. Speaking of the average investment amount in these companies, Eklavya Gupta, the co-founder and chief executive officer of the firm, said it
