Most Companies Die Because They Don’t Get Capital At Right Point: Recur Club Founder
The investors get access to quality companies and new asset classes for recurring revenue who do not have any exposure while generating fixed returns on investments. So it’s a win-win for both parties
Startups must put in a lot of effort in one more crucial area in addition to the onerous task of meeting all the legal requirements for incorporation- raising funds, both to start the firm and to run it. Your wonderful concept would remain just that without this.
Recur Club facilitates companies to sell their recurring revenue streams as a tradable asset class. Recur Club partners with companies by unlocking fast, flexible, transparent and non-dilutive capital at every stage of their journey and provides an ecosystem to amplify their growth.
Here is exclusive interview with Eklavya Gupta, Founder and Co-CEO of Recur Club.
How has your journey been since you started with Recur Club in 2021?
It has been great. We have had an exponential journey. We launched in August 2021. It has been a tremendous experience. We have had around 1000+ companies on our platform. These are the companies with recurring revenues looking at an altogether new way to finance themselves which is based on their predictable recurring revenue cashflows. We are a fintech platform, we facilitate finance for such companies. We algorithmically score their recurring revenues as a whole for which investors on the other side bid for the recurring revenue streams. We have over $300 million ARR registered on the platform, which is growing. We have had around 19x growth since and we are currently growing at 50 per cent month-on-month. The demand for an alternate product like ours works very well. Ours is the solution to equity. While it’s a tech-based product help companies solve their capital requirement as and when needed.
How does Recur Club help streamline the processes involved in investing in an asset class?
The tech product that we have developed, it’s our Intellectual Property (IP) and core as well. We integrate with companies invoicing software, financing software, and banking data which are automatically ingested into our models, the outcome of which throws like a financing limit, tenure and discount that they can get on their recurring revenue streams for twelve months and all of this happens within hours. The maximum amount of time the companies typically take was in data to-and-fro managing. We have shortened the time cycle significantly and then we have investors on the other side who have bids edge on their listed profile and investment strategies based on which transaction happens and companies end up with cash in the bank within a couple of days. So this has been totally revolutionary. The investors get access to quality companies and new asset classes for recurring revenue who do not have any exposure while generating fixed returns on investments. So it’s a win-win for both parties. Bringing efficiency in the system of dilutive financing to the new asset class is what we stand for.
How does technology enable inclusive growth of all the stakeholders in the domain?
On the company side, we integrate their invoicing financial software, banking data, and some alternative data points, like GST, MCA, LinkedIn. We use double data sources through which our models automatically calculate and vice versa, from the investors’ side, we have integrations with the investors as well.
Integration with the investor's side and pre-agreed strategies based on which they have their investment bits coming in for the specific side of the company. All this process happens through technology instantly and within 48 hours. That’s where the key USP of the company stands. This brings both the investors and the company together through technology which is the real mode with which we play.
You must be eyeing to expand and venture into new spaces. What is your expansion plan?
We started with SaaS and Tech services as the core sector. We have evolved our target markets to more assets like B2B recurring revenue businesses which include B2B tech platforms, EdTech, etc… As we are growing, we are also targeting bigger companies… with our model maturing and more capital partners on-board on the platform. We have recently funded a couple of series C-funded companies as well. It’s both sector expansion and target expansion at once. We want to enable companies to build an ecosystem and help them in multiple financial products as possible. One-stop solution for financing products for companies.
In what ways are alternative financing options beneficial for entrepreneurs?
They need capital. Capital is the fuel of the engine. Not everyone wants to give away equity all the time. Diluting equity should be very selective, it should be done at the right point in time for the right end-use cases. You should use the equity in your pre-revenue phases or activities that have an unknown payback period. For predictive expenses, you should not use equity and give discounts to your customers. And hence, solutions like alternative financing solutions like recurring revenue financing and any other non-dilutive solutions can start coming into the picture which complements equity perfectly and helps founders raise money. Getting capital at the right point in time is very important because most companies die because they don’t get capital at the right point in time.
How do you stand apart from your competitors? What is your revenue model?
As of now, we don’t really have any competitors. As far as our revenue model is concerned, it is working on charging a small fraction of fees from both sides when they trade their customer cash flow on the platform.
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