Founders of fintech platform Klub speak on impact of the Covid-19 crisis on Fintech sector
Klub is a fintech platform providing growth financing to loved consumer brands through Revenue Based Financing (RBF). Revenue Based Financing takes a revenue share as returns instead of equity dilution or fixed EMIs, making it ideal for a post-Covid financing ecosystem.
Klub provides skin-in-the-game capital to loved brands across sectors including wellness, FMCG, direct-to-consumer, food services, fashion, beauty & personal care, subscription, and online-first retailers for recurring marketing, inventory, and capex spends.
As a hybrid marketplace, Klub sources capital both from institutional partners and from individual super-fans of the brand, its patrons, for a combination of monthly returns and for social rewards. Klub’s investment platform combines financial product innovation, deep data-driven analytics, high-frequency collections, and community engagement. Read with an exclusive interview with the founders Anurakt Jain, Co-founder & CEO, and Ishita Verma, Co-founder & COO.
1. When was Klub launched? What was the idea behind the launch of Klub?
Klub was launched in 2020. The idea behind launching Klub was to fill the gap that traditional funding models are unable to fulfill for loved local brands. Klub aims to grow and support homegrown brands. We recognised that it is difficult for brands to raise capital through traditional financing methods. In our past careers, we had seen multiple brands not receive funding despite having a good product, founding team, financials, and customer affinity.
Through our unique marketplace setup, we aim to not only provide them access to alternative skin-in-the-game financing but also to an exclusive community where brands and investors can come together to explore and grow together more holistically.
2. Can you provide more information on the details of the founding team?
Anurakt Jain, Co-founder & CEO at Klub, plays a central role in driving all executive decisions, external relationships, and vision of the company. Before co-founding Klub, he was an intrapreneur at InMobi creating two global businesses, Glance and TruFactor, as core growth areas for the group. He also brings years of professional experience as a venture capitalist with DFJ and Vertex, as an investment banker and as a current angel investor. Anurakt graduated from IIT Delhi, an MBA from The Wharton School, and is a CFA charterholder.
Ishita Verma, Co-founder & COO shapes the internal strategy, operations, and growth of Klub. She brings with her 9+ years of experience across early-stage investment banking, investing, trade finance and public/private equity markets. Ishita set-up multiple funds across regions as a part of Snyder Group. Prior to that, she led the financial services practice at Unitus Capital and worked in institutional equities at Kotak Securities. Ishita graduated from LSR and holds an MBA from IIM Bangalore.
3. How has Covid -19 impacted the Fintech sector?
Fintech is well-positioned for growth in a post-Covid market with increased digital adoption and solutions incorporating the market volatility. Underlying market fundamentals have accelerated in the last 3 to 4 quarters, which would have taken 3 to 4 years.
Through its unique alternate financing model for empowering local Indian consumer brands, Klub is filling the void left by traditional models. Multiple online-first brands have already recovered to pre-Covid levels, while offline brands are transitioning to online to target customers, triggered by the change in consumption trends. Klub is uniquely positioned to provide financial support to such D2C and online brands.
4. What has been the impact of the Covid-19 crisis on your business performance and growth?
Klub has already invested in over 25 loved local brands and aims to work with over 350 brands in 2021 alone. As a hybrid marketplace providing flexible financing to D2C brands through Revenue Based Financing, Klub believes that there will be a consumption resurgence towards local brands that establish brand affinity and engage their loyal community.
Klub has joined forces with external strategic partners across digital marketing, logistics, influencer marketing, networking platforms etc to provide more than just financial support to brands.
5. What is your business model? What is the USP?
Klub is a fintech platform providing growth financing to loved consumer brands through Revenue Based Financing (RBF). Revenue Based Financing takes a revenue share as returns instead of equity dilution or fixed EMIs
Klub provides skin-in-the-game capital to loved brands across sectors including wellness, FMCG, direct-to-consumer, food services, fashion, beauty & personal care, subscription, and online-first retailers for recurring marketing, inventory, and capex spends.
Klub is an ideal investment platform for brands that need flexible, non-dilutive capital. Klub provides brands with scalable capital and has completed multiple investment rounds for its brand partners as they scale. Our investment platform combines financial product innovation, deep data-driven analytics, high-frequency collections, and community engagement.
Klub is also the only player offering a hybrid model for investment by raising capital from both NBFCs and financial institutions along-with individual patron investors across different products. Our mission is to build an ecosystem that enables founders to have access to not just funding but also to a community that helps leverage the knowledge and network to build a truly scalable brand.
Another aspect that makes our funding model unique is that Klub invests and provides risk participation in every brand on its platform, operating on the mantra of being a skin-in-the-game partner.
5. What is the current investment portfolio of Klub?
Klub has invested in over 25 D2C and online brands including Tjori, Third Wave Coffee, Pipa Bella, Wellversed to name a few. In our repertoire of brands, we have companies spanning across F&B, Ed-tech, Fashion & Beauty, Electronics, Apparel. We have built our products in a way that companies across stages and sectors can reach out to us for funding.
6. What is the roadmap ahead for Klub?
Klub's current network has over 25 brands and nearly 1000 patrons. We are now looking to grow this community to over 350 brands and over 5000 patrons in 2021 alone. Klub is also looking to expand into SEA markets given the growing number of consumer brands, which is expected to go over $400 bn by 2023 with new-age brands contributing to a growth of 25%.
7. Please share the details of the investment received so far.
We had raised $2 million in our pre-seed round led by Sequoia Capital India’s start-up scale-up programme Surge. Other participants in this round included EMVC Fintech Fund, Better Capital, Tracxn Labs, and 9Unicorns. Our angel investors include Naveen Tewari - Founder & CEO, InMobi Group, Kunal Shah - Founder & CEO, Cred, Shradha Sharma - Founder & CEO, YourStory. We have not raised any further rounds of funding post this and will do so soon.
