InfoEdge Ventures-backed fintech Recur Club, which operates a debt marketplace for startups and small and medium businesses, Thursday said it is launching a platform that will lend Rs 150 crore, or $17.3 million, to direct-to-consumer (D2C) startups in the quick-commerce sector.
Recur Club will partner with lenders to provide loans in the range of Rs 1-8 crore to D2C startups, with the quick-commerce space heating up as players such as Amazon and Flipkart join the likes of Swiggy, Zepto, and Blinkit and create opportunities of new-age brands to sell their products.
“As these brands grow, their demand for working capital in terms of inventory and receivables starts to increase significantly,” Eklavya Gupta, CEO and co-founder of Recur Club, told VCCircle.
“With more than half of the 300 consumer brands we've financed utilizing quick commerce platforms, it's clear that these businesses are primarily investing in scaling inventory to keep pace with consumer demand and employing strategic marketing efforts,” he said. “Given this increase in demand, we thought to segregate a pool of capital dedicatedly for the commerce segment.”
Through the fund, the startup hopes to fund about 30-45 such startups, where the debt funding is directly linked to cash-flow on these apps. “In recent months, we've seen a tripling in demand for debt financing, largely due to the burgeoning quick commerce sector outstripping traditional e-commerce,” Gupta added.
Founded in 2021 by Gupta and Abhinav Sherwal, an IIM Calcutta alumni, Recur Club allows institutional investors to compete to offer funding to businesses. It is backed by investors such as InfoEdge Ventures, Village Global, LC Nueva, and Titan Capital among others.
It last raised $30 million in a mix of equity and debt led by InfoEdge Ventures and Village Global.
Gupta said while it does not have plan to raise funding immediately, the company might consider for a capital raise in the latter half of the year.