SaaSBOOMi, a community for software as a service (SaaS) companies in India, announced that it has launched an initiative to help startups raise unsecured working capital loans to better weather the economic downturn caused by the Covid-19 pandemic.
For this initiative, SaaSBOOMi has partnered with Indifi, an NBFC that supports small businesses, to help entrepreneurs get through these tough times. Beyond this financing, the SaaSBOOMi team will further help in optimising businesses and bring efficiency in Capital Management.
“As a community, we are stepping forward to support, mentor, and guide SaaS startups through these challenging times. Access to working capital is a key element of this support and we have come together to offer just that to the startups at SaaSBOOMi that need it the most,” stated in their blog on Medium.
Manav Garg, founder and CEO of Eka Software Solutions, said SaaSBOOMi is partnering with non-banking finance companies (NBFCs) to make available revenue-based financing for SaaS startups. In the first phase, the community has partnered with lender Indifi, which has set aside about Rs 50 crore for eligible companies.
“We are bringing together startups and NBFCs and have come out with a model where we’ll enable revenue funding for SaaS companies,” said Garg. “This works with SaaS companies because they already have steady cash coming in.”
To be eligible, startups must have annual recurring revenue (ARR) of over $250,000; should have been in business for over 24 months, with proof for 12 months of recurring revenue and at least six months of stable revenue.
“The idea is to help companies ride through this period of uncertainty and survive the next 12-18 months, after which I’m sure the funding and market situation will improve,” Garg said.
According to SaaSBOOMi, only 8% of SaaS companies in the country are venture-backed, making it extremely important for them to get other kinds of financial help to survive in the current crisis.
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