India: Sharing economy startups turn to venture debt for asset financing
28 April 2019 6:05 PM GMT
Startups in the sharing economy space including brands like�Drivezy, Zoomcar, VOGO, Bounce, Furlenco and RentoMojo are increasingly turning to venture debt.
- Technology startups in the sharing economy space including brands like Drivezy, Zoomcar, VOGO, Bounce, Furlenco and RentoMojo are increasingly turning to venture debt, as opposed to parting with equity, in a bid to retain more control over their companies.
- Similarly, Alteria Capital invested ₹ 8 crore (via the debt route) in scooter-sharing firm Vogo as part of the startup's Series A round led by Ola (ANI Technologies Pvt. Ltd), Stellaris Venture Partners and Matrix Partners last October.
- "Sharing economy startups these days go through an initial equity round, and then get some assets financed via an on-balance sheet debt structures…gradually they move to more flexible off-balance sheet funding structures once they establish a track record and have credibility.
- Bengaluru-based vehicle rental start-up Drivezy added around 15,000 bikes in 2019 compared to just 1,574 bikes in 2018, thanks to venture debt and asset financing routes.
- To be sure, sharing economy startups depend heavily on asset financing and other firms or funding routes to fund the purchase of their assets (bikes, furniture, electronics, etc) when compared to other consumer Internet models.
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