Small and medium enterprises (SMEs) are perceived as the foundation of all economies. India, a nation of small businesses, is home to more than 64 million SMEs, collectively contributing about 30% of the country’s GDP. However, a lack of financial resources has been a pertinent hindrance to the constant and positive growth of these SMEs. The lack of traditional assets as collateral for loans from conventional financial institutions has been a major roadblock to securing funds. Hence, came the concept of alternative financing.
This article discusses different alternative finance options available for SMEs so that securing funds does not pose a hindrance to acquiring their working capital and sustainable development.
The following are the alternative finance options available to Indian SMEs in 2023:
Securitized debt refers to a financial arrangement where an entity, often a bank, also referred to as the originator, provides loans to a group of borrowers, usually small and medium-sized enterprises (SMEs). These loans are then combined into a package or portfolio, which is sold to investors in the capital market through the issuance of notes. This entire process is facilitated by a Special Purpose Vehicle (SPV), which is a separate legal entity established specifically for this purpose and is backed by the loan portfolio. These asset-backed notes are evaluated and rated by credit rating agencies and are made available for purchase by capital market investors. Additionally, it is also to be noted that the originator bank may choose to retain a portion of these notes.
Crowdfunding
Crowdfunding is a form of external funding from a large audience where everyone contributes a small amount of the funding requested. Instead of securing funds from a small group of specialized investors, this method allows small borrowers to raise funds who are unable to do so through conventional means due to credit scores and higher interest rates. It is a web-based method to seek substantially smaller funds through social platforms to fund new ventures. Crowdfunding relies heavily on social media penetration, and India, with its high number of Facebook users, is well-positioned for this financing method.
According to the World Bank report titled ‘Crowdfunding’s Potential for the Developing World,’ Facebook usage could prove to be a useful tool because in crowdfunding the “single most predictive factor for the rate of emergence is social media penetration.”
Your Guide to Understanding Crowdfunding
Factoring
Factoring is a financial arrangement that provides short-term financing to businesses, especially SMEs, by allowing them to sell their accounts receivable (invoices) to a specialized institution called a “factor” at a discount. This provides the SMEs with working capital financing. The primary benefit of factoring is that it provides immediate money to the seller to finance the business. Factors buy the right to accept payments against the seller’s receivables and release 80-90% of the invoice value to the seller. A CRISIL study on 5,000 SMEs reveals that SMEs can increase their profit by at least 15% if they receive time payments from large corporations. It would facilitate SMEs to reduce interest costs, improve profitability, and have a positive impact on the long-term health and sustainability of India’s SME sector. Another major advantage it provides is that the factored receivables are removed from the bankruptcy estate of the seller and become the property of the factor.
Supply chain financing is quite similar to factor. Here the supplier gets advanced payment on the outstanding invoices from a third-party funder for a small fee. But the difference is that here the financing solution is being initiated by the buyer where the buyer agrees to pay an invoice early for a discount. The benefit of the buyer here is the discount on the invoice price, whereas, the benefit of the supplier is early payment, typically at a discounted rate less than factoring. Supply chain finance can be made possible at any point of sale, purchase, production, and at the point of delivery as well.
Warehouse Receipts
In this setup, commodity producers deposit their commodities at a warehouse facility known for its secure and trusted storage practices. The warehouse issues a receipt that certifies its possession of a particular quantity of a commodity that adheres to specific standards. The deposit is then used as collateral to the depositor to secure loans from lending institutions. The lender places a lien on the stored commodity, preventing its sale until the loan is repaid. SMEs often face challenges in providing conventional collaterals, such as real estate or assets, to secure loans from banks and financial institutions. This mechanism reduces risks for the lenders and serves as a viable option for SMEs to secure credit for their working capital.
Participating Loans
Participating loans are a type of loan agreement where the interest or repayment to the lender is not fixed but is instead dependent on the financial performance of the debtor firm or the borrower. The remuneration or returns to the lender can be tied to various factors such as sales or turnover, profits, and share price. The lender’s returns may increase or decrease based on the borrower’s sales or revenue. If the company’s sales go up and generate more profit, the lender may receive higher returns.
However, participating loans do not share in the losses incurred by the borrower. If the debtor firm faces financial losses or difficulties, the lender does not bear the burden of those losses. The lender’s returns are contingent on positive financial performance but do not involve assuming any of the financial risks.
Also, if the debtor firm goes bankrupt or undergoes liquidation, the providers of participating loans are treated similarly to other loan creditors. They receive a share of the proceeds from the liquidation process, but this distribution is not influenced by the borrower’s financial performance at that point. In essence, during bankruptcy, participating loan providers become regular creditors and do not have any special privileges based on the loan’s contingent nature.
Purchase Order Finance
Purchase Order Finance (POF) allows a supplier to secure funds during the production or manufacturing stage. It is designed to address the working capital needs of SMEs when they have received a confirmed purchase order from one or more customers but lack the necessary funds to fulfill the order. The SMEs receive a verified purchase order from the buyer and subsequently estimate the cost required for the production and delivery of the product, which includes labor, raw materials, packaging, shipping, and insurance. The purchasing order is submitted to the financer, and following the approval of the loan, the approved costs are typically paid directly to the suppliers. The loan supports the SMEs in preparing final goods for shipment to the buyers as part of working capital finance.
FAQs
What are the alternative finance options available to Indian SMEs?
Following are the alternative finance options available to Indian SMEs:
Securitized Debt
Crowdfunding
Factoring
Supply Chain Financing
Warehouse Receipts
Participating Loans
Purchase Order Finance
What is Securitized Debt?
Securitized debt refers to a financial arrangement where an entity, often a bank, also referred to as the originator, provides loans to a group of borrowers, usually small and medium-sized enterprises (SMEs).
What is Supply Chain Financing?
In Supply Chain Fiancing the supplier gets advanced payment on the outstanding invoices from a third-party funder for a small fee. Supply chain finance can be made possible at any point of sale, purchase, production, and at the point of delivery as well.
India has witnessed a significant increase in the emergence of startups in the last few years. India is now the world’s second-largest startup hub, with over 94 unicorns in total. Indian entrepreneurs have evolved into powerful drivers of the country’s economic progress. This is undoubtedly the best time to start a successful company in India.
With the Government encouraging people to form their startups, more and more people are indulging themselves in this journey. Currently, we have over 65000 startups in the country. The best part is every sector be it fintech, digital marketing or any other, is flourishing in the country.
Graph showing the Top 5 most valued Indian Startups as of the end of 2021
You got a Startup idea to build a product that could change lives. You have the BusinessModel and Product Development roadmap laid out. You might even have a small team to get started in your startup. And then comes the real problem that every Entrepreneur faces – funds to hatch the plan.
We all know that timing plays a major role in the success of any startup. It’s not a simple task to transform the ideas into a profitable business. Founders might not always have the funds to launch the product at the right time in the market at the beginning. Since growth is the main goal in the initial stages, startup owners must understand how to raise the “seed” capital.
What are Seed Funds?
Startups raise seed funds essentially for operational costs like hiring the right people, purchasing tools, leasing offices and more. This crucial step forms the solid basis for launching a thriving business at the right time. When you start a business, the most important thing that is needed is funding. Seed funding means the funds by investors provided to your business in the initial stage. The investors pour their funds in return for an equity stake at the initial stage of business. It is at the early stage that the investment by the investors is done, which helps the business to grow and make its capital. Seed funding should not be confused with a loan. Investors get equity in the company for their investment. Now that we know what seed funds are and why they are crucial, let’s dive deeper into the different ways to raise seed capital for your startup.
Crowdfunding is becoming increasingly popular in recent years. Many startups have successfully raised seed money through crowdfunding platforms like Kickstarter, Indiegogo and Wefunder. The process involves creating a campaign to convince and persuade thousands of people to invest and buy your product before its developed. This method is a great strategy for founders who do not want to give up equity and dilute the company at the seed rounds. The idea is to build the product from the money made from pre-sales and ship it when ready. Startup founders also utilize crowdfunding websites to understand the market and assess the demand for their products. The idea is to build the product from the money made from pre-sales and ship it when ready.
Friends and Family are mostly the first places every entrepreneur reaches out to for investment when getting started. Some founders offer equity in the company but many consider this investment as a loan. This method provides a little breathing room in terms of loan repayment.
Accelerators
Acceleratorstypically exist for startups that need assistance with launching and growing the company. Accelerators like Y Combinator runs programs to choose startups for investing. The selected startups get a pre-decided amount in return for a specific percentage of equity. They also support startups with Mentorship and Networking events where the founder gets exposure.
Incubators
Incubatorsare specifically created for startups that are at an early stage. They facilitate the development of ideas and the validation of market fit. The investments are usually small as most founders get this funding to nurture the idea and introduce innovations. Incubators also offer Workspace and Mentorship Support and Networking Opportunities for founders.
Many established corporations consider startups as a major source of fresh talents and innovative ideas. Megacorporations are always on the lookout for new ways to invest in emerging technological innovations. Again, this type of financial help gives the startup much-needed exposure and is frequently a precursor to a potential acquisition.
Bootstrapping
Let’s not forget that not every startup needs to raise money at the seed stage. Bootstrapping is the process of funding the startup with your savings and reinvesting the profits from the business. Many startup founders use their own money to get their businesses off the ground to eliminate giving away equity at the initial stages. Bootstrapping, on the other hand, might put entrepreneurs under further financial strain.
Venture Capital Funds
Venture capital firms offer seed funding for startups with high growth potential. Venture capitalists provide both professional experience and money to entrepreneurs. This type of investment calls for the exchange of a company’s equity for financial assistance. VCs review a lot of projects but only invest in a small percentage of them, so you’ll have to stick out from the pack.
Angel Investments
Angel investors are affluent people who invest their own money as seed capital in businesses in return for equity of the company’s ownership. This process is relatively quicker than a VC investment. Many angels are known to use convertible debt as it has the advantage of deferring the company’s value until the next funding round. Angel investors also get discounts for investing early in the startups.
Debt Funding
Debt funding is often provided by the bank, an investor or any financial institution to the startup founder. Here, the founder is borrowing the money for a fixed rate of interest instead of giving away any equity in the company. The capital must be repaid with the interest at the agreed timeline. It’s important to note that the only advantage for the investor here is the interest amount.
Government Grants and Schemes
The Indian government has stepped up to support young entrepreneurs who need help with growing their startups. The government has taken initiatives likeThe Startup India Seed Fund Scheme (SISFS) which intends to support startups with the conceptualizing of new ideas, developing prototypes, determining the demand in the market and monetization.
Conclusion
There is no doubt that raising the seed funding is difficult. Gaining the right understanding of the options available for you is the key and we hope that our information has helped you. You must also know and understand how the different kinds of investors operate, how they make financial decisions to help your startup and how their seed fund can help you grow. It’s also worth noting that seed financing isn’t just for the early stages but it’s also for the years ahead. Also, keep in mind that timely capital is critical for companies to stay up in a challenging market like India. A startup that sets growth initiatives should be able to use the seed capital to raise further investments.
FAQs
What is Seed Funding?
Seed funding means the funds by investors provided to your business in the initial stage.
What are some of the effective ways of raising seed funds?
Some common and effective ways of raising seed funds are Crowdfunding, Friends and Families, Accelerators, Incubators, Bootstrapping, etc.
How many Startups are there in our Country?
There are currently over 65900 startups in the country. But the number is expected to rise shortly.
What is The Startup India Seed Fund Scheme?
The government has taken initiatives like The Startup India Seed Fund Scheme (SISFS) which intends to support startups with the conceptualizing of new ideas, developing prototypes, determining the demand in the market and monetization.
The concept of crowdfunding has just started to gain momentum in India. ‘Funding’ is the first problem new people, entering the world of business for the first time, find it difficult.
Startups have to turn to institutions and angel investors because there is a lack of funds for bootstrapping or a lack of help from friends or family. But banks tend to refuse business loans for first-time entrepreneurs and often ask for huge collateral. Sometimes, it’s difficult to convince investors also. That crowdfunding platforms can play a key role in helping entrepreneurs make the most of their ideas.
Crowdfunding is defined as a pooling of resources by a group of people for a common goal. In this concept, common mass is approached to raise funds for your idea execution, project, startup, or cause.
According to a survey conducted, less than 2% of the companies end up raising funds from professional investors. This is large because of reasons ranging from non-scalable businesses to the lack of exits. The rest 98% still need to raise funds to take their startup to the next level.
Some of the popular crowdfunding sites in India are Kickstarter, Wishberry, Indiegogo, FuelADream, Fundable, Ketto, Catapooolt, and Milaap which not only help Startups or individuals to launch a product but also test the acceptance of the product in the market.
If we compare the crowdfunding market in India to that of the United States, we are still considerably smaller. However, if estimates are to be believed, this can soon change.
Let’s see how does crowdfunding works in India for businesses and startups and its benefits.
In the donation model, individuals make a financial contribution to a project without any expectations of financial benefits.
Lending Model
In this model, individuals will lend money to the project with the expectation of being repaid under the terms and conditions agreed.
Reward-Based Crowdfunding
In reward-based crowdfunding, people contribute to your campaign and you give them a reward in return. The reward could be a DVD of the Film, The Gadget, etc. Equity cannot be given as a Reward.
Investment Model
In the Investment model of crowdfunding, the investor receives an equity stake in the project. Equity-based crowdfunding is not so common in India. Crowdfunding is becoming a lifeline for new entrepreneurs and small businesses as it helps them in many ways without losing much equity. Let’s see how crowdfunding helps startups and businesses in India.
How to Build a Crowdfunding Website or Platform in India?
Easy Steps to Create a Crowdfunding website or platform:
Find a Crowdfunding Niche
Choosing a niche helps to classify your site from others, and can also provide value to your campaign creators and sponsors. Every new crowdfunding website or platform is dedicated to a niche. That means that the website will host crowdfunding campaigns for one particular matter or kind of product.
This is due to the big platforms that are available to crowdfunding creators. There is no use in trying to compete with the bigger crowdfunding platforms on the internet because you will likely lose.
Use Crowdfunding Technology
Search for the right technology that you want to use for your Crowdfunding website. Not all technology is paid, but when it comes to running a successful Crowdfunding platform, you want to be sure that there are no faults so users have a great experience on your website.
You get what you pay for, if you use free Crowdfunding software, do not be surprised when something goes wrong with your website. Choosing a SaaS (Software as a Service) product can provide you with real-time support. This way you can get your site up and running fast, with as few issues as possible. And if there is a problem on the site, you are not left to your own to fix the issue.
Connect The Payment Gateway
It is usually best to open up a new bank account for the Crowdfunding platform if you are serious about taking a transaction fee on the donations to the website. If you were not already known, most Crowdfunding websites are taking a transaction fee on each donation to the campaigns on the site.
This is a great way to generate an income on the side, by utilizing Crowdfunding. Depending on the usage of the platform, a bank account can be set up and connected to the payment gateway to receive a transaction fee.
Add The Content
Once you are finished choosing the niche, platform, and connecting your payment solution to your bank account, next, is the most time-consuming step, adding the content to your platform. You should have access to the front-end source code, to manipulate the User Interface (UI) to your standards.
You will be restricted by the default UI and features from the product if you do not have access to the front-end source code. It is best practice to create all of the content, and have all of the images/videos ready before adding the content to the site. This can save a lot of time by simply copying and pasting the content onto the site.
Launch The Platform
Once the platform is all set up, the next step is to launch the platform. Before launching the platform, however, it is recommended to have Crowdfunding campaigns ready to host their campaign on your platform before launching.
The first handful of campaigns on your new platform is likely going to be from friends and family. If those campaigns are not available, you need to start searching for campaigns by joining online communities in your niche, and in the Crowdfunding industry.
Market The Platform
The website is finally created and launched on the internet. The last step is to market the platform. The whole idea is to market the Crowdfunding platform successfully so that many campaign creators are approaching you to create a campaign on your platform. This way, you do not have to do any work to make money. This can be a great solution for those that want to generate monthly revenue by simply approving or disapproving Crowdfunding campaigns.
Starting up a company is a very risky and challenging journey. Launching a crowdfunding campaign hedges these risks and serves as a valuable learning experience. Crowdfunding as it is today allows an entrepreneur to gain market validation and avoid giving up equity before going all out and taking a product concept to market.
Crowdfunding Saves Equity
Crowdfunding is a great alternative way to fund a venture and it can be done without giving up equity or accumulating debt.
Crowdfunding As Marketing Tool
An active crowdfunding campaign is a good way to introduce a venture’s overall mission and vision to the market, as it is a free and easy way to reach numerous channels.
Crowdfunding Proves The Concept
Showing investors and convincing yourself that your venture has received sufficient market validation at an early stage is hard. Crowdfunding makes this possible as people get to know about your product and show their response.
Crowdfunding Helps to Brainstorm Ideas
One of the biggest challenges for small businesses and entrepreneurs is to be able to cover all the holes that a venture might have at an early stage. By having a crowdfunding campaign, the entrepreneur has the ability to engage the crowd and receive comments, feedback, and ideas.
People who view the entrepreneur’s campaign and decide to contribute are ones that believe in the success of the company in the long run. In essence, these people are early adopters. Early adopters are very important to every business, as they will help spread the initial word without asking for anything in return. Such people care about the venture’s brand and message and are likely to be loyal customers throughout their life.
Crowdfunding is Easier Than Traditional Applications
Applying for a loan or pursuing other capital investments are two of the most painful processes that every entrepreneur has to go through, especially during the early stages of the company.
Crowdfunding is Free PR
The momentum created by successful crowdfunding campaigns attracts potential investment from traditional channels and attention from media outlets. Success stories make for interesting reading, and reporters are always hungry for them.
Crowdfunding Provides The Opportunity of Pre-selling
Launching a crowdfunding campaign gives an entrepreneur the ability to pre-sell a product or concept that they haven’t yet taken to market. This is a good way to gauge user reaction and analyze the market in order to decide whether to pursue or pivot on a given concept.
Crowdfunding is Free to Launch
Launching a crowdfunding campaign on some of the platforms is absolutely free. You will be charged a minimal fee when you raise funds.
This is the major step where most of the crowdfunding projects fail in India and the project creator never realizes it. As crowdfunding is a very niche stage in India, it is very important for crowdfunding platforms to help project creators in creating projects and help them to shape their projects for an Indian audience. Choose your crowdfunding portal wisely.
Every crowdfunding platform in India takes a different approach to projects. Do little research on all the portals. Talk with some platforms, regarding your project and find out which crowdfunding platform fits perfectly for you.
Create the Perfect Pitch Video for your Crowdfunding Project
This is the most important factor which most of the people in India forget. Most people see Kickstarter and create crowdfunding projects, thinking that they’ll get millions overnight, which is never true.
Entrepreneurs need to understand the mentality and psychology of Indians, compared to other nations. Indians love giving. We give millions and billions of rupees every year in temples and charity but when it comes to lending a hundred rupees to some person we think thousand times. That is where your crowdfunding video and description play a vital role in raising funds from them.
Most people judge a crowdfunding project by just looking at the video. Make your crowdfunding video short and simple. Don’t add fancy 3D imaging graphics or VFX in the video. Nor add too much animation to it. Keep it to the point, make it clear.
Remember, your end result from this video is money, not entertainment. Show your product, show yourself, your team, your workspace, your past work, and tell why someone should fund you or what change your project is going to make in society. This helps to build trust for the contributor.
Project Description
Write a detailed description but add attractive graphics along with it. In observation, it was found that most of the people in India write 2-3 lines or 1-2 paragraphs without graphics in their description. Writing only 2-3 lines shows that you are not serious about your product.
A dedicated investor would never be investing in your project without knowing in detail about it. It is suggested to keep long description, as the one who is going to give a large amount of money to a stranger will surely want to read everything.
Create a graphic picture that shows your product, your rewards, your timeline when you’ll deliver me rewards, and most importantly, your product specification.
Rewards
You need to understand that in India, most of the target audience is the middle class. Nobody will be willing to give more than 5% of their monthly salary unless you’re giving them something cool in return.
Only rich people will give your project above Rs 5-10K and that if you’re giving them a customized product or something special in return. You need to consider giving a special reward gift in return which provides them emotional value. For example, you can give them your product with a celebrity’s signature or better, help them meet the celebrity.
PR (Public Relation)
Most of the people in India are unaware of crowdfunding. So, it is very important for the project creator to get the right reach of the right audience. Once your crowdfunding project is ready, you need to decide your communication strategy before making the project live.
Create a mailer list, from your school friends to current enemies. Tell them all about your project and ask them to fund it once the project is live. Don’t be ashamed, be straightforward in asking to fund your project. If they don’t fund it, at least ask them to share a word of mouth or a small post on their social media. It will help you to raise a little fund. Then, it’s time for PR.
Get in touch with all your press contacts and tell them about your crowdfunding project. If you don’t have any contacts, hire a PR agency. If you can’t hire a PR agency, ask your crowdfunding portal to do PR on your behalf.
Some of the crowdfunding platforms in India help with that too. PR or Public relations are a crucial factor in any business. You need to have credibility in writing to prove your genuineness and potential in your PR.
News articles will help you to achieve this and act as a backbone. It’ll also help you to get strangers to know about your project and in some cases, raise funds from them.
Get in touch with bloggers who write articles regarding your project field. Let them know about your project and ask them to write an article on your project. Choose a blog with good reach and engagement.
Social Media and Follow-up
Build a social media strategy and create some unique campaigns surrounding your project. Social Media will help you to get that boost for making your project a success. A creative campaign will help your project go viral and even to reach the audience who’ll fund it.
Do Facebook posts thrice a day.
Interact with strangers on Twitter by tweeting, hourly.
Tell every possible person on the internet about your project.
Send emails to all your contacts regarding your project, weekly.
Take a follow-up via email or phone with the people who said they’ll fund your project or showed their interest.
Connect with writers who wrote about your project in news articles or blogs. Ask them to update their articles about your new achievement.
Put yourself in the investor’s shoes and see what you will want to see if someone asks for money from you.
Crowdfunding is a good option for new startups with people and investors getting aware of it. It is a platform to show your product to investors if you do not have many contacts in the business world. The main advantage of crowdfunding is that you do not necessarily have to lose equity while raising funds. However, the Indian crowdfunding system does work in that way a lot.
There might be some people who will fund you without equity but you will get the majority of the funds from professional investors who will demand equity in your company. It’s your job to choose the right crowdfunding option.
FAQs
What is crowdfunding and how does it work?
In its simplest form, crowdfunding is getting others to finance the creation of a product, project, business, or work of art. It’s extremely advantageous for entrepreneurs and eliminates the overbearing upfront costs that stop most startups before they begin. It uses a web-based platform or social networking sites to solicit funds for the fundraiser by showcasing the story to potential donors or investors.
What are some of the benefits of crowdfunding?
Crowdfunding can be a fast way to raise finance with no upfront fees in businesses. Pitching a project or business through the online platform can be a valuable form of marketing and result in media attention. By sharing your idea, you can often get feedback and expert guidance on how to improve it, etc.
What are some of the popular crowdfunding platforms in India?
Kickstarter, Wishberry, Indiegogo, FuelADream, Fundable, Ketto, Catapooolt, and Milaap are some of the popular crowdfunding sites in India.
What is an example of crowdfunding?
An example of a successful crowdfunding project is The Veronica Mars Movie Project. Fundraiser Rob Thomas used crowdfunding to fund the movie. The project was a great success surpassing their $2 million goals by an additional $3 million. The crowdfunding project also gained international reach.
Mumbai is the financial hub of India and among the wealthiest city globally. Headquarters of most financial institutions like the Bombay Stock Exchange, RBI, National Stock Exchange, and the Mint are located in Mumbai. Even the HQs the giant business groups like Tata Group, Aditya Birla Group, Essel Group, and Reliance Industries are situated in this city. It has also become the startup hub of India and has given rise to numerous startups recently. Here we have listed down a few successful startups in Mumbai.
800+ stories, thousands of founders, and millions of visitors. Want to be the next?
StartupTalky is where founders, entrepreneurs, startups and businesses hang out and look up to for inspiration. If you have the means, we have the medium! Inviting founders and startups who are building sustainable solutions from ground zero! Startups who run the show, StartupTalky will let the world know!
Founders: Ashish Hemrajani, Parikshit Dar & Rajesh Balpande Year Founded: 1999 Industry: Ticket Booking Funding: $224.5 Million
Bookmyshow Logo | Startups in Mumbai
BookMyShow is India’s largest online entertainment ticket booking brand. People can easily buy movie and shows’ tickets on their website. BookMyShow has also helped less popular theatres and their artists to gain an audience. The company provides ticket management software to cinemas. Along with that, the company promotes movies and shows on their website which generate good revenue for them.
BookMyShow was founded by Ashish Hemrajani, Parikshit Dar, and Rajesh Balpande. In 1999, they began from a small room in Mumbai and now have spread themselves globally. BookMyShow acquired 7 startups including MastiTickets, Townscript, Burrp, and Nfusion.
Ola is a taxi aggregator and bridges the gap between cab owners and commuters. Ola doesn’t own any cars but partners with a number of taxi drivers and owners. The company also owns the food startup “Foodpanda”. Owned by ANI Technologies Pvt. Ltd, Ola was started in Mumbai, it is now headquartered in Bangalore. Ola has continuously been expanding its range of services. Ola has its own e-wallet called Olamoney which makes it convenient for riders to pay for the rides.
The startup was founded by Bhavish Agarwal and Ankit Bhatia in 2010. You can read our Ola Startup Story to know more about the startup.
Cleartrip
Founders: Stuart Crighton, Hrush Bhatt & Matthew Spacie Year Founded: 2006 Industry: Travel booking Funding: $56.4 Million
Cleartrip logo | Startups in Mumbai
Cleartrip is an online travel booking company. It lets travelers book anything from flights to hotels. The startup started in Mumbai but now has offices in Bangalore, Gurgaon, and Dubai too. Along with B2C services, Cleartrip provides B2B services like “Cleartrip for Business”. A corporate travel management tool. AgentBox is another B2B tool for travel agents.
Cleartrip was founded by Stuart Crighton, Matthew Spacie, and Hrush Bhatt in 2006. It has raised a total of $56.4 million of funding from Concur Technologies Inc., DAG Ventures, and Gund Investment Corporation.
Founders: Rishi Malhotra, Vinodh Bhat, & Paramdeep Singh Year Founded: 2007 Industry: Music Streaming Funding: $131.6 Million
JioSaavn logo | Mumbai Startups
Saavn is a music streaming freemium service which offers songs in Hindi, English, and other regional languages. It works on the freemium model. With the free version, there are ads and some limitations whereas, in the paid version, there will be better streaming quality and many other features. The company has the rights to over 50 million songs. Later, saavn was acquired by Jio for more than $1 billion and it became JioSaavn.
The startup was founded by Rishi Malhotra, Vinodh Bhat, and Paramdeep Singh in 2006 as “BODVOD Network”. Before it was acquired, Saavn had raised funding of a total of $110 million.
Founders: Mohamed Galib, Sony Joy, Lishoy Bhaskaran & Anoop Sankar Year Founded: 2013 Industry: Fintech Funding: $7.5 million
Chillr | Mumbai Startups
Chillr allows instant money transactions directly through the individual’s bank account through the app itself. However, after the launch of the UPI system, Chillr is has nothing new to offer. But as Chillr was already running a kind of “UPI” system from 2013, they have a lot of Banks as their partners.
Its a brand run and owned by Backwater Technologies Pvt Ltd.Mohamed Galib, Sony Joy, Lishoy Bhaskaran, and Anoop Sankar together started Chillr in 2014.
Founders: Ashish Shah Year Founded: 2011 Industry: Furniture Funding: $245.3 Million
Pepperfry | Startups in Mumbai
Pepperfry was founded with an idea to make furniture shopping online convenient for married couples who aim to start their life afresh with a new home. The company sells sells home décor and furniture. Launched in 2011, Pepperfry is facing tough competition from FabFurnish and Urbanladder.
Ashish Shah, founder, and CEO of PepperFry is a graduate of Pune University. He later did a diploma course in Ghaziabad and has 15 years of work experience in the market.
Founders: Hemanth Goteti and Zishaan Hayath Year Founded: 2013 Industry: E-Learning Funding: $112.1 Million
Topper logo | Mumbai Startups
Toppr is an e-learning app trying to make studies fun with its interactive content. It provides study material to students from class 5th to 12th standard and also for students appearing for entrance examinations and scholarship exams.
The ed-tech startup was founded by Hemanth Goteti and Zishaan Hayath, graduates from IIT Bombay. Toppr has raised a total of $65.1 million of funding mainly from Milestone Trustee Services and Alteria Capital.
Founder: Falguni Nayar Year Founded: 2012 Industry: Beauty Products Funding: $341.9 Million
Nykaa Logo | Mumbai Startups
Nykaa is one of the top from the list of entrepreneurs in Mumbai. It is an e-commerce website that offers beauty and wellness products from all the leading brands such as Lakmé, Kaya Skin Clinic, L’Oréal Paris, M.A.C, Bobbi Brown, Clinique, Estee Lauder, and many more. Nykaa follows inventory–led model. It has inventory spaces in Delhi, Mumbai, and Bengaluru.
Falguni Nayar who founded Nykaa in 2012, is a former managing director of Kotak Mahindra Capital Company. Nykaa has 35 stores. Nykaa launched its collection of in-house beauty products in 2017.
Founders: Jaydeep Barman and Kallol Banerjee Year Founded: 2011 Industry: Food Delivery
Faasos | Startups in Mumbai
Faasos is a “food on demand” service. You can order the delicacies of your choice through its app or website. Faasos operates in more than 15 cities of India and 200+ locations. The company promises to provide a refund of up to INR 200 in case of late delivery. It shows how committed Faasos is towards giving customers the best service.
Faasos was founded by Jaydeep Barman and Kallol Banerjee in 2011. This Mumbai-based startup has raised $60 million in funding. Faasos is rapidly growing in India with the help of social media influencers.
GrabHouse
Founders: Prateek Shukla & Pankhuri Shrivastava Year Founded: 2013 Industry: Real Estate Funding: $13 Million
GrabHouse Logo | Mumbai Startups
With growing economic opportunities, people are moving from small towns and districts to big cities. For this, people require accommodation. GrabHouse helps people rent an apartment, find a PG, and a house where they can stay while working or studying in the city. What was unique in GrabHouse was that they provided fully furnished sharing or private homes with only 2 months security deposit. This is what attracted everyone towards the company.
The startup was founded by Prateek Shukla and Pankhuri Shrivastava in 2013. In 2016, Quikr acquired GrabHouse for $10 million and rebranded it as QuikrHome. Now, the website of GrabHouse redirects users to Quikr’s website.
HOUSING
Founders: Rahul Yadav + 11 Year Founded: 2012 Industry: Real Estate Funding: $147.8 Million
Housing.com Logo | Startups in Mumbai
Housing is a marketplace platform that has interactive maps allowing the visitor to look deep into the real estate market. People get a huge option of property on the website and can contact the owner to make the deal. Launched in 2012, the company claims to have more than 6,000 brokers with 1500 employees across 45 cities.
Housing.com is the mind-work of Rahul Yadav along with his team of 11 Co-founders. The startup acquired Indian Real Estate Forum in 2015 for $1.2 million. They also acquired HomeBuy360 in the same year for $2 million. Later, housing merged with PropTiger.
Founders: Sandeep Lodha Year Founded: 2015 Industry: Wedding Funding: Acquired
Weddingz Logo | Mumbai Startups
India is the world’s largest destination for wedding marketing. Keeping this fact in mind, Weddingz was founded to make it easier to choose the wedding venue online. The soon-to-be-married couples can book a venue, rooms, and other wedding related items online quickly and fast.
Weddingz.in was founded by Sandeep Lodha. Sandeep is a graduate of Wharton Business School and IIT-Delhi. The startup was acquired by OYO in 2018. OYO bought 100% stakes of Weddingz in a cash-and-stock deal.
Founders: Piyush Jain & Khushboo Jain Year Founded: 2014 Industry: Crowdfunding Funding: $4.5 million
ImpactGuru | Mumbai based Startups
ImpactGuru provides complete crowdfunding solutions to empower individuals, NGOs, and social enterprises to raise funds for medical emergencies, personal needs, creative projects, or any social cause. It is also the first crowdfunding platform in India to launch a smartphone app for customers with an AI-supported story builder. Over 20,000 patients have benefited from 2 lac donors with ImpactGuru. Also, over Rs, 150 crores / $20 million has been mobilized across 15 countries on this online platform.
The startup was founded by Piyush Jain and Khushboo Jain. ImpactGuru has raised a total of $2.5 million from various investors.
Founders: Vineet Budki, Nidhi Varma, Prashant Choudharya & Biswajeet Karmakar Year Founded: 2014 Industry: Travel guide Funding: $1.1 million
Guiddoo | Startups in Mumbai
Guiddoo is a platform to discover and book in-destination experiences. It was initially started as an audio guide. Later, it turned into an app pivoted to tours and activities booking. The app helps travelers to discover and book in-destination activities across 15 countries.
This Mumbai based startup was founded by Vineet Budki, Nidhi Varma, Prashant Choudharya, and Biswajeet Karmakar. They have raised a funding of $1.1 million to expand their services in other countries.
BAJAAO
Founders: Ashutosh Pandey Year Founded: 2005 Industry: ECommerce Funding: Bootstrapped
Bajaao Logo | Startups in Mumbai
Bajaao, a Mumbai-based e-commerce startup that sells musical instruments and other equipment online. The company also provides the servicing of musical instruments.
The startup was founded by Ashutosh Pandey in 2005. Aashutosh is himself a music lover and wishes to spread his love for music. So, he started his own commercial venture by selling instruments to young musicians and people who wish to take it up as a hobby.
Founders: Rahul Singh & Mithilesh Said Year Founded: 2015 Industry: Travel Funding: $325k
Ithaka Logo | Mumbai Startups
Ithaka is a chat-based travel planning app, that covers destinations from Thailand, Bali, Europe, UAE, Singapore, Malaysia, and Turkey. The startup was launched as an in-destination experience booking website but later pivoted to travel planning. This free platform is for the people who want to plan and execute their own trips and not to book a pre-made package.
Ithaka was founded by Rahul Singh & Mithilesh Said. Both the founders love to travel and found inspiration for their startup while traveling. Rahul is the CEO of the company while Mithilesh is the CTO.
Founders: Rajiv M Ranjan & Neeta Ranjan Year Founded: 2018 Industry: Peer to Peer Platform for Lending Funding: $1.1 million
PaisaDukan Logo | Mumbai Startups
PaisaDukan is a Peer-to-Peer (P2P) lending platform. PaisaDukan acts as a mediator between borrowers and investors. The company serves as a digital marketplace to enable borrowers to meet their financial needs, provide investors a safer and smarter investment option, and aid financial inclusion.
A creditworthy individual can borrow money for a variety of purposes like education, health care, marriage, small business, etc at a rate of interest as low as 12% p.a. And an investor (online money lender) can lend to borrowers at an interest rate which can be as high as 24% p.a. through an alternative financial channel. Investors can choose and fund borrowers based on their risk appetite.
Heckyl Technologies
Founders: Mukesh Madras Year Founded: 2010 Industry: Tech Funding: $7.5 Million
Heckyl Technologies Logo | Mumbai Startups
Heckyl Technologies is trying to get structured as well as unstructured data in real-time analytical products to financial institutions and corporates. Heckyl provides a Risk Early Warning System (EWS) Software Platform for managing credit risk. It gets millions of data as input for businesses from which it creates output to help the credit risk team to identify potential defaulters.
Heckyl Technologies was founded by Mukesh Madras in 2010. The startup has received a total of $7.5 million in funding.
Founders: Priyanka Save & Nagesh Pai Year Founded: 2010 Industry: Wine Funding: Bootstrapped
Fruzzante` | Mumbai Startups
Fruzzante` is the world’s first and only producer of a cider-style alco beverage made from Sapodilla (chikoo) extracts. Fruzzante` is also the only company producing fruit-based (non-grape) bottled products in the wine category that is commercially available. It is both vegan and gluten-free which makes it a healthy choice. The company also makes wines in other flavours like mango, pineapple, and spice garden.
The startup was founded by Priyanka Save & Nagesh Pai in 2010.
Founders: Tarun Jagwani and Natasha Jagwani Year Founded: 2012 Industry: Jewellery Funding: Bootstrapped
Tsara is a jewellery designing and manufacturing company. The main focus of Tsara is destination jewellery. The company has four lines of jewellery to complement various occasions and events and launches a new collection every few months.
The startup was founded by the couple, Tarun Jagwani, and Natasha Jagwani. The story behind this idea is that Natasha once lost her precious jewellery. So, the couple realised how important destination jewelries are. You can read the Tsara’s Startup Story to know more about them.
Founders: Shiraz Khan Year Founded: 2004 Industry: Digital Marketing Funding: Bootstrapped
SpiceTree Design Agency is a digital marketing firm that provides services in all the areas of digital marketing. Some of its services are web designing, print, social media design, SEO, SMO, re-targeting, etc.
SpiceTree Design Agency was founded by Shiraz Khan in 2004. The company was started with Shiraz’s saving of Rs. 1,00,000. You can read the Startup Story of SpiceTree Design Agency to know more about it.
TAC Security
Founders: Trishneet Arora Year Founded: 2013 Industry: Cyber Security Funding: $1.5 Million
TAC Security is a cyber-security solutions provider with a mission to anticipate, resolve, and mitigate cybersecurity risks and challenges. This Mumbai-based startup provides network, application, and web security solutions to corporates, banks, startups, governments, and law enforcement agencies.
Trishneet Arora founded TAC Security Solutions in 2013 at the age of 19. Trishneet has a strong inclination towards technology, gaming, and computers since he was a child. He is one of the youngest ethical cyber security experts in India. Its current client portfolio includes names such as Reliance Industries Limited, Gujarat Police, Punjab Police, AMUL, Avon Cycles, RALSON, and Central Bureau of Investigation (CBI), among others. TAC Security raised a funding of $500k from Vijat Kedia, MD, of Kedia Securities.
Monk Entertainment
Founders: Ranveer Allahbadia & Viraj Seth Year Founded: 2017 Industry: Digital Marketing Funding: Bootstrapped
Monk Entertainment | Startups in Mumbai
Monk Entertainment or Monk-E is a digital marketing startup that works with influencers and manages their marketing. Brands also connect with them and the company finds the most suitable influencers for them. Along with that, they provide video production to influencers and brands.
The startup was co-founded by a popular YouTuber, Ranveer Allahbadia. He has a YouTube channel called “Beerbiceps” and his friends help him with managing it. So, he and his co-founder, Viraj Seth came up with the idea to help other fellow influencers. The startup is bootstrapped and was founded in 2017.
LabelBlind
Founders: Rashida Vapiwala Year Founded: 2018 Industry: Health Tech Funding: Bootstrapped
LabelBlind is a digital platform that gives out information about the nutritional value of food products. The main purpose of the platform is to provide nutrition literacy to the people. The platform reviews and rates food items so that customers can choose healthier food options for themselves after examining the value of different food products.
The company was founded by Rashida Vapiwala, an expert nutritionist in the year 2018. This startup is bootstrapped and has been one since its formation. Over 8000 packaged food labels reviews and ratings can be found here for the consumers to decide and choose from.
CoinDCX
Founders: Neeraj Khandelwal and Sumit Gupta Year Founded: 2018 Industry: Cryptocurrency Funding: $109 Million
CoinDCX is a company that gives Cryptocurrency related financial services. It is a cryptocurrency trading network that ensures its customers a quick, risk-free, and effortless trading experience. It is said to be the largest and safest cryptocurrency legal exchange platform, where buying and selling of various types of cryptocurrency are possible.
Neeraj Khandelwal and Sumit Gupta, two graduates from IIT Bombay decided to try their hand in the cryptocurrency industry when they realized that Bitcoin has gained quite a momentum in the world. Both of them decided to use Blockchain technology to deal with financial inclusions and now it has received$109 Million of funding.
MailIt is a company that deals with dispatch aggregating and work on dispatching various types of packages and all types of mailroom management service. Apart from that, they also provides services involving dispatch of bulky documents and parcels nationally and internationally as well.
It was founded in the year 1987 by Mahesh Shirodkar. The company recently got funded by Ratan Tata in the year 2021, although the amount was not disclosed. The headquarters is situated in Mumbai, India. Many leading corporations are relying on the services of MailIt.
Cube Wealth
Founders: Satyen Kothari Year Founded: 2016 Industry: Fintech Funding: $500000
Cube Wealth is a automated wealth technology application that helps people investing in a simple manner. All these are done under the guidance of well known Investment manager. All the investment of the user are managed in this app and one can do that without facing any problem.
Cube Wealth was founded in the year 2016 by one of the most successful person from the fintech industry in India that is Satyen Kothari, the person who founded Citrus pay. He is also the current CEO of Cube Wealth.
ePayLater
Founders: Akshat Saxena, Aurko Bhattacharya and Uday Somayajula Year Founded: 2015 Industry: Fintech Funding: $180 Million
ePayLater provides people an option to buy now and pay later like a credit card card from online portals. Basically it is a platform that provides an instant credit limit where one can buy whatever they want quickly with just a single click and pay for that item later.
ePay Later was formed in the year 2015 and is now on the path to simply the customer experience with their innovations. Recently the company has raise $2.5 Million by Pravega Ventures in the February of 2021.
Dream11
Founders: Harsh Jain and Bhavit Sheth Year Founded: 2008 Industry: Fantasy Gaming Funding: $1.62 Billion
This is an application that allows its users to creat imaginary team and play matches with them, through which they can also win money if the players performs well in the actual matches. The games that can be played here are Cricket, Football, Kabaddi and Basketball.
It is India’s biggest sports gaming platform and have over 140 million users. Both of the founders Harsh Jain and Bhavit Seth are an ardent sports lover and they founded the sports gaming platform in 2008. Recently the company has collabed with popular TiktOk star Khaby Lame in their new campaign #Dream11PeDimaagLagaNa.
Acko
Founders: Varun Dua and Ruchi Deepak Year Founded: 2016 Industry: Insurance Funding: $458 Million
This is a private insurance company in India and offers its customers insurance facilities, products and commissions. It is a digital platform and everything that is done here is online. It has become the first digital service provider in the country, India.
It was founded in the year 2016 by Varun Dua and Ruchi Deepak, the company has received fundings from Catamaran Ventures, Accel Partners, SAIF Partners. The current CEO is Varun Dua and the headquarters of the insurance company is located in Mumbai, India.
Apna
Founders: Nirmit Parikh Year Founded: 2019 Industry: Employment Funding: $193.5 Million
Apna Jobs is all about providing job opportunities to the people of India. Unemployment is a big concern in this huge country so digital recruitment can help in solving that, that is what the motive is. It is a job platform where one can find jobs and mingle with the community.
Through this app one can find job as per their skills. It was founded in the year 2019 by former Apple executive, Nirmit Parikh and with its work it was able to become the fastest Unicorn in the country.
This is the list of startup companies in Mumbai. Hope you liked it.
If you know any other Mumbai-based startups, please contact us. We will connect with them to feature in the list of startups in Mumbai.
FAQs
How many startup companies are there in India?
India has about 50,000 startups India in 2018; around 8,900 – 9,300 of these are technology-led startups 1300 new tech startups were born in 2019 alone implying there are 2-3 tech startups born every day.
How can I get startup benefits in India?
Benefits of Startup India Scheme:
Self Certification under Labor and Environmental Laws.
Tax Exemption for Three Years.
Tax Exemption on Investment Above Fair Market Value.
Easy Winding Up of Company.
Startup Patent Application and IPR Protection.
Relaxation in Public Procurement Norms.
SIDBI Fund of Funds.
Is Oyo a startup?
Oyo Hotels and Homes are raising $1.5 billion from founder Ritesh Agarwal, SoftBank Group Corp. Agarwal, who founded Oyo in 2013, has built it into India’s second-most valuable startup with a valuation of about $10 billion. Its service covers 1.2 million rooms in over 80 countries, including 590,000 rooms in China.
What are the top Mumbai based startups in India?
Some of the top mumbai based startups are:
BookMyShow
Ola
Chillr
Grabhouse
Pepperfry
Housing
Ola Cab
Toppr
Nykaa
Impactguru
Is Mumbai good for startups?
Mumbai is an attractive startup hub which is contributing highly in Indian startup eco-system. It has great connectivity with other countries and a growing number of co-working spaces. The presence of prominent venture capital firms in Mumbai makes it best for startups.
Being an entrepreneur, you will have to have a business plan that stands out but is also realistic at the same time. You need to check your business plan and have a marketing plan that is flexible. It should give a reason, be convincing enough, generate curiosity for people to believe in you, and the idea to invest in your startup.
Remember Shark Tank?
It is becoming so popular now that India has its own show based on the American series. The show is based on ideas from entrepreneurs who are competing against each other to come up with ideas that get the sharks (investors) to bite the bait. One interesting fact remains that the sharks, though paid to be judges, would be investing in the ideas, if any, from their own pockets.
So as a startup, where do you get your money from? Kickstarter solves that problem for you. So, Here’s a look at marketing strategies employed by Kickstarter.
Kickstarter was founded in 2009, is located in Brooklyn (United States), with investors that include Thrive Capital, Lowercase Capital, Business Angels, and 11 other Investors.
Now Kickstarter is a reward-based crowdfunding app. With a rating of 4.1 stars on the Play Store. Where you can support creative projects that you like, bringing ideas to life. These projects may belong to different sectors like art, dance, fashion, films, music, technology. Gaming and Tech niches are popular on this app and have raised the most money via the platform.
The app lets users:
Stay updated with the projects that you have backed up.
Add the projects that you like to your favourites, and it notifies you if a project is ending.
Share projects with your friends through email, messaging, and more.
For example, If you, as a backer or investor, have given a certain amount of money to the campaign. You will receive rewards based on the amount that you have donated.
If you have funded a project which involves selling books at affordable rates, and you may have chipped in $50, the organization could give you some books based on your favourite genre, discount coupons, or even a set of best-selling novels based on the amount donated.
How does Kickstarter work?
For starters, when you launch your campaign on Kickstarter, there are four possibilities of what will happen:
You can have your campaign fully funded. Your idea worked, people liked it and invested in it. The app will charge you a fee of around 5% of the amount of money that you have raised in your campaign.
Your campaign is funded but not fully. Again, the app will charge you a fee of around 5% of the amount of money that you have raised in your partially funded campaign that you decide to cash out.
Your campaign idea does not work out and you have not raised any capital. The app will charge you no fees for it.
Your campaign is partially funded, but you decide not to cash out and let go of it. In that case, again, no amount of fees would be charged by the app.
The payment gateway charges a fee ranging from 3-5% on the funded amount.
So now it is clear that Kickstarter falls under Rewards-based crowdfunding.
Marketing Strategy of Kickstarter
Taking up space on digital media, starting with its website to having a mobile app that is available on Play Store and iOS.
Even though Kickstarter uses collaboration, having a positive impact and other strategies mainly, its marketing strategy thrives on using the digital platforms to its advantage rather than using traditional media.
Social media marketing
Kickstarter is all in for having its presence on social media. Kickstarter is there on the following platforms to communicate with its audience.
Instagram
Kickstarter Instagram
Kickstarter has a count of 299k followers. Where the company uses Instagram to share moments from the events they have done, sharing the backstories of the contributors, announcing any new features it has added, and even most of its campaigns.
Twitter
With one million followers. Kickstarter shares its creators’ projects, pinning tweets to make people aware of its campaigns and sharing information that urgently needs disposal to the ones that can get help by funding.
Digital Marketing
YouTube
Kickstarter on YouTube has 23.9 k subscribers. Where they have divided their playlists into two groups: Created playlist and Kickstarter creators basics.
Apart from these platforms, Kickstarter also has its presence on LinkedIn and Facebook.
Website
Kickstarter Homepage
Though the website appears a little cramped and confusing. The websites main menu has projects about:
Comics & Illustration
Design & Tech
Film
Food & Craft
Games
Music
Publishing
The left sidebar navigation menu offers more content like collections, things on the radar of Kickstarter, categories, and sections.
Mobile
The mobile app saves the users from the hassle of going through the website for the backers to support their favourite ideas, explore new creative ideas, and access the projects that they might have backed. Get to know your creators by turning them into their stories and vision. The app is available on the Play Store and Apple Store. Though the app is good, it does not have any ratings yet.
Email marketing
Delivering newsletters basically on what is going on, the best projects, while having specific niches like Kickstarter Art, Kickstarter Invent, Kickstarter Music, and more. Kickstarter definitely uses email marketing. It has defined mainly two types of newsletters: the daily that is sent to subscribers every morning, and the other one which is still under construction and will be a more creator-focused newsletter.
Another part of the website of Kickstarter is the growing resource that serves as an emotional and practical guide from creative people in which it has a whole section reserved for exploring creative independence.
You can find articles/blogs here written in the interview style or search anything by the tags. It also has a list of people listed from A-Z providing you with any information you may need about the associated person. The creative independent celebrates 5 years of Kickstarter. Keeping the tone informal but at the same time engaging the users.
Making a positive impact: Building a sense of community
This is done by Kickstarter by sharing the achievements of the organization, celebrating, and talking about the events that bring people together. For instance, or even making people aware of the new features that it’s adding. Even of a particular niche. For instance, out of the many reels shared by Kickstarter on Instagram one celebrates the spirit of journalism and independent publishing on its platform.
Inclusion
Something as simple as making a video about how to say Kickstarter in sign language has a great positive impact. Making other communities out there feel seen and heard is a good way of showing that you care and remember those who are often not represented in the media space. Sharing messages from American Sign Language (ASL) to stand up with the Deaf community.
Film festival – Year: 2015
Kickstarter had its own film festival with two feature films and three short films held across 31 cities nationwide for like-minded people to get together and enjoy the two-part program.
Partnerships
For Kickstarter partnering with the people who have their projects that make an impact, bringing attention to urgent concerns is a way of showing what Kickstarter believes in. It has partnered with:
EcoVadis
Kickstarter EcoVadis
The first collaborative platform providing Supplier Sustainability Ratings for global supply chains. This was done with the main aim of running more environmentally conscious campaigns. They also shared the message from social entrepreneur Devishi.
UN Refugees
Kickstarter UN Refugee
At the call of the White House, on Kickstarter, had started another project raising funds working with the UN to aid refugees. This cause-driven campaign shows that Kickstarter cares for the people by giving.
For The Radical Film festival with The Eye Slicer
Kickstarter The Eyeslicer
In 2019, they collaborated with the Eye Slicer to host and celebrate the independent film community which featured signings by iconic filmmakers and booths for indie film artists, distributors, publishers, zine-makers, and more.
Partnerships are a good way to create more exposure by sharing resources when organizing group events and such. Kickstarter uses these strategies to increase community awareness by joining hands with others.
Event Marketing
Before the pandemic hit. There were block parties, dance parties and celebrating other fun moments, turning them into events to celebrate and bring the spirit of community.
Launching campaigns
Kickstarters make/ 100 campaign
Kickstarter Make 100 Campaign
The make/ 100 Campaign that offers 100 rewards promotes creativity among the community to create anything for the next 100 days with a low-pressure way to start the new year. This campaign has been up and running since the year 2018; the call to join this campaign is open to everyone gearing up for the new year in January.
Conclusion
Kickstarter majorly uses various digital mediums/platforms to launch many of its projects and campaigns. Though it may be successful in many other regions. It needs to tailor and adapt its strategies for other demographic segments too, especially if it wants to be successful in India.
FAQ
Where does Kickstarter get traffic?
Kickstarter gains traffic from various blogs and online communities.
What are the marketing strategies employed by Kickstarter?
The marketing strategies employed by Kickstarter are Social media marketing, content marketing, event marketing and email marketing.
A Startup is a company that is just on the verge of developing and offering services and products that are not available in the market. Startups are now becoming a significant part of every country’s economy; they are providing jobs to the people of this generation and are carrying huge responsibilities.
They are hugely contributing to the development of the socio-economic conditions of the country. Not only that, through the use of new technologies, they are providing solutions to the problems as well. Every industry is getting to see new Startups and some of them are going to be the future of that industry.
The survival of a startup hugely depends on the fund, if there is no fund a Startup can never see the daylight, it will shut down even before the beginning. So, for preventing from getting shut down, one needs to arrange funds and must invest in the business and these can be done in two ways.
One is getting money funded for the startup and the other one is through Bootstrapped. In this article, we will discuss the difference between funded startups and Bootstrapped startups and what they are all about. We will also talk about which will be a better option for your startup. So let’s get into the business.
“It’s almost always harder to raise capital than you thought it would be, and it always takes longer. So, plan for that.”
Bootstrapped startups are those businesses, where you don’t take capital from an outside source or venture capitalist and totally depend on your own funds for the survival and growth of the business. There is no process for external funding here, you are the leader here and you need to take all kind of decision that is necessary for your business.
Pros and Cons of a Bootstrapped Startup
Pros:
The thing about bootstrapped startups is that the founder doesn’t have to depend on outside investors for the funds and the ownership solely belongs to the founder.
The founder of the business needs to just focus on the business products and services and there is no need for issuing equity.
The control of the business belongs to the founder and they don’t get succumbed to any pressures by anyone and have the control to take any important decision regarding the business.
There are no investors who can suggest and help the founder in making decisions. Plus, the lack of connections of different investors leads to a slower pace in gaining the trust of the public.
Examples of a Bootstrapped Startup
GoPro
GoPro Logo
This company is one of the best brands out there for selling personal cameras that capture video photographs was first founded in the year 2002 by Jill Woodman and Nicholas Woodman. It is a successful bootstrapped startup that has now become a big company that sells high-definition personal cameras.
Nicholas Woodman got the idea of making such cameras that can shoot action photography while he was on a surfing trip to Australia. He funded $10,000 from his own pocket to his business. He did many jobs such as emailing and truck driving and at last, he was successful. In 2004 his company, GoPro sold the first analogue camera of 35mm.
GoPro First Camera
Zerodha
Zerodha Logo
A popular example of a bootstrapped startup in India is Zerodha, Zerodha is an Indian financial services company founded in 2010 by Nithin Kamath and Nikhil Kamath.
Nithin Kamath started trading in stocks at the age of 17. When the market crashed between 2001 and 2002, he lost 5 lakh rupees. He still continued to trade in stocks and later started his own brokerage Kamath & Associates. In 2010 he founded Zerodha.
Now the company has a revenue of 1,093.64 crores INR and is valued at $2 billion. The founder of Zerodha in a series of tweets explained why the company doesn’t raise any funding.
Nithin Kamath Tweet on Why Zerodha does not raise Funding
While starting a business, an amount is needed as an investment. There are some startups who decide to raise amounts from the public as the fund for the company. Here you look out for investors also known as venture capitalists, who are actually interested in your business and they provide you with your required amount of capital in return for your company’s equity.
Pros and Cons of a Funded Startup
There are some advantages and limitations that one faces when they chose to raise funds from the public for their business and they are:
Pros:
Funding from outside provides businesses with lots of opportunities related to finance which in turn becomes a big factor in the fast growth of their business.
The Investors who are funding the business guide the owner of the startup with their experience, if the need arises.
The connections of these investors can be a plus point for the startup and it can help them in earning the trust of the public.
Cons:
When external forces started involved in the business, decisions related to payments, finance, equity by the startup founder become limited.
The founder loses a big amount of the company to the investors and thus holds a very small part of it.
Example of a Funded Startup
Flipkart: Funded by Venture Capital
Flipkart Logo
This online shopping website was founded by Binny Bansal and Sachin Bansal in the year 2007. The online E-Commerce company that started its journey by selling books now sells everything. In the year 2018, Flipkart got its first fund from Junglee and Helion Venture’s founder Ashish Gupta. After that, Flipkart received $10 million from Tiger Global Management. Tiger Global Management is an American investment firm.
Flipkart keeps getting bigger and bigger with various investments by the investors It even acquired Myntra in the year 2014 for $270 million dollars. In 2018 Walmart acquired Flipkart and became the fund provider of the business and Walmart now owns almost an 82.3% stake in the Indian E-Commerce giant. It has raised almost $12.6 billion. As per reports, the current value of Flipkart is $37.6 billion as of 2021.
Funding Vs Bootstrapped Startup: Factors That Entrepreneurs Must Consider
In the choice between funding and bootstrapped, one must decide what they want with their business. Here they need to consider some factors that would help them in deciding between funding and bootstrapping. Those factors are:
Objective
The main aim of your business is one of the prime factors that help you in deciding the future of your startup. If you just want a profitable business, bootstrap is the option for you. On the other hand, if you want your business to have maximum revenue growth then, external funding is the answer.
Pace of Growth
When you are the only one who is investing in your business, the growth will be slower in pace. As the resources you have, including the financial ones, are limited in nature. While funded business provides resources like new connections and finances thus the growth is way faster.
Control
In a Bootstrapped startup, you have control over your startup. Whatever the important decision is, your call is the last one. On the other hand, funded startups don’t give you that much freedom, where you can take the final decision for your startup as it involves the investors who are funding your business.
Conclusion
In the end, the decision of choosing between funding and bootstrapping is yours. If you decided to bootstrap your business, in the future you can go for funding as well. Whatever you do, you need to consider the factors while making the decision, because the survival of your business depends on this.
Businesses are crucial for this world. You exchange what you have for something that you want. Trade is the basic brick that establishes the foundation of businesses. Which cements humans together with better cooperation abilities. As an entrepreneur goes about starting a business, he faces many problems. One of the problems is the issue of raising capital. If done correctly can change the future of enterprise for the better. Otherwise, it will sink the whole ship of sustenance.
Money capital is the lifeblood of every investment. Without this fuel, there can be no product, no property, no sales and no cash flows. This is an article talking about the same issue of raising capital. Read to know, should you even raise money? when you should not raise money and when to stop raising capital.
If you don’t know about raising capital, or If you don’t know how you will end up managing money – don’t raise funds. So, do your homework first. Deciding in advance, the goals and goalkeepers for the organisation is crucial. It will make the road to success otherwise it will be a recipe for disaster.
Remember, raising capital is for achieving scale. Scale means growth in this context. Raising money is essentially losing control and getting scale. You need to let go of total control in some cases of raising funds. So, If you are not ready to jump off a cliff with a firm belief in your team and culture. Don’t seek a raise.
Another con is simple yet thoughtful. You don’t need to raise. Yes, a raise is the least type of money that an entrepreneur wants. Even a Venture capitalist will tell you this. VC cheques are the worst kind of money. The favourable kind of money is your customers’ money. Your own revenue. The best way is to go bootstrapped. Again, If you are risk-averse, stay put.
Disadvantages of Raising Funds
The first question that a rational person should ask is “Should he/she really raise money?” This question is a valid and important point to consider. Raising capital is not a fairy tale, it has its downfalls too.
If you are not ready to face the downfalls, smart advice will be that you stop chasing funds. These disadvantages can affect different people differently. Some might be more affected than others.
Let us see some of the responsibilities that you will have to carry if you are seeking capital.
Ownership
When someone tries to raise capital, he is often left with the choice of diluting ownership of the company. Which means lessening the controlling power of entrepreneurs. It will allow interference of the Venture Capitalist in the decisions.
This interference can be effective or it can affect the growth of the company, depending on the scenario. If the entrepreneur is someone who wants full control of the company, reconsider the choice of raising funds for your startup.
Accountability
An entrepreneur who raises capital has to be accountable. Depending on which source of raising he chooses, he needs to be accountable. The source or the Venture Capital can push and pinch for specific and exact usage of money.
A business person has to iterate his ways in different scenarios. He/she needs to be experimenting with a product. In order to get the perfect product-market fit. In some cases “being accountable for the capital raised” can also reduce the experiments of an entrepreneur. Leaving no space or very little space for mistakes.
Debt
This can be seen as a subsection of the previous issue. Raising capital is debt. Some people might get overwhelmed by the thought of using others’ money. This heavy feeling of responsibility can disrupt the natural flow of an entrepreneur.
Which also points out someone’s personal relationship with money. A person having a bad relationship with money will fear its responsibility. That responsibility rises manifolds if the money is a debt.
When to Stop Raising Funds for your Startup?
If you are through the hurdle of deciding to raise capital. Let us discuss when to stop your fundraising rounds. It is imperative to mention that you need to take professional advice on this matter. Investors write a cheque when they are compelled by your work. When raising capital, remember the time frame. Check these points to get some bookmarks.
Ideal position –
So, when you’ve managed to impress an investor, make sure you know the ideal condition. The ideal condition is to raise as much as you want to reach profitability. The reason behind this is that it allows you to stop raising for more rounds. It will lessen the hassle one needs to go through for another round of funding. Remember to stop with an ideal cash position in mind.
Survival of Operations –
When raising capital, think about your burn rate. You need to consider how many months you are planning your operations to survive. It can be a year to 18 months. This definitive time frame set a bar for raising capital. Even though different products and startups have different burn rates, making sure your burn rate is in check is helpful.
The Growth Pace –
If your company is in a good cash flow situation. Like, when the company is adding more customers and revenues and employees. When it is growing really fast. Then you should refrain from raising large funds. The reason is that if you raise 2 to 4 years of funds at this growth pace, then by the end of 2 years you would earn a similar amount by your own operations. There is a good chance you reach that cash by operations.
So at that point, sitting on a huge debt is of no use. Checking your growth pace before taking financing decisions helps.
Cash needs –
It is always tempting to raise capital. To have surplus money than you actually may need. So it is important to remind yourself that there are harms too.
First, raising capital is expensive and complex. If an entrepreneur is not ready to handle this hassle, it can be disastrous. Second, due to unpreparedness, you may never know the ideal position of raising, which can make you raise too much. This can be a worst-case scenario. Third, remember raising deprives focus.
An entrepreneur’s main focus should be to provide value, anyhow. Raising money will get investors on board and this will take your arm and a leg. They might interfere with your vision too. So keeping these points in mind, you can set an ideal cash position for the company.
We get to know with this enlightening article that raising capital is complex. The best money way is still the bootstrapped way. It is considered the smoothest. But when it comes to hacking growth and scaling your product, a VC can do wonders. It can provide you with a primary boost or a launchpad for flying.
Nonetheless, that launchpad can also become the reason for your own perishment. Knowing how much you need, your burn rate of operations and the scale you want to achieve is crucial in setting a definitive goal for your fundraising. Having your vision and current situation intact in your head will go a long way in fixing this question.
It is strongly recommended that you go and take the path of organic growth. That is, growing your business naturally should be preferred. Before going on a run for chasing capital and Silicon Valley dreams. You might need the right advice, the right homework and just the right negotiations to get to an ideal position. This is not rocket science but it is nothing sort of less than that.
FAQ
How long should a seed round last?
A typical range seed round lasts between 12 and 18 months.
How much traction is enough for investors?
The “traction” that’s relevant for your current stage should be in the range of 0.1% to 0.5%.
If you’re a developer, you know how hard funding and traction are to come by. Most software startups try crowdfunding and fail — they’re doing it wrong! To crowdfund your app, and supercharge your business, let’s look at what works, what doesn’t, and get started right! It’s no secret that the crowdfunding industry is booming. It seems like every day you hear about an exciting new startup crushing their campaign goals and launching their company via Kickstarter or Indiegogo.
Despite the rapid growth of SaaS crowdfunding platforms and campaign successes, crowdfunding is still a foreign concept to most. As such, let’s briefly explain the mechanics and guidelines for a more solid foundation before exploring launching crowdfunding for software startups or SaaS crowdfunding.
In its simplest form, crowdfunding is getting others to finance the creation of a product, project, business, or work of art. It’s extremely advantageous for entrepreneurs and eliminates the overbearing upfront costs that stop most startups before they begin.
Why SaaS Crowdfunding Has Been So Successful?
With the advance and expansion of e-commerce, individuals are shopping locally less, now being able to buy anything with the click of a button. This has democratized the consumer–business relationship because customers have a far greater choice.
With the power to choose, consumers are opting more for small startups and more personal connections. Hence the explosion of Crowdfunding SaaS. Furthermore, backers prefer to be early adopters, people who get the product first and are actively part of the startup’s success. In addition, entrepreneurs who were once unable or unwilling to pursue financing can now cut the risk and crowdfund instead.
Crowdfunding for software startups seems the perfect platform to launch an app or software product. Unfortunately, non-tangible products are poorly received. This stems from the origins of crowdfunding because crowdfunding was originally conceived as helping creative people create that which could never exist without funding.
Crowdfunding SaaS your next business venture can be a fast and relatively easy way to raise money. However, you should know which type of crowdfunding is best for your business and what it requires. Here are the most common types of business crowdfunding:
Equity Crowdfunding
The most traditional type of funding in this list is equity crowdfunding. You sell a piece of your business to an investor or groups of investors and they provide you with the funding (capital) to move your business forward.
Donation Crowdfunding
If you’re a nonprofit or local business, donation-based funding might work for you. It simply requires you to create a campaign asking for donations for your business. The money is donated, and there is nothing to repay.
Debt Crowdfunding
Also called “marketplace” funding, debt crowdfunding is when business owners borrow money from other individuals, instead of from a bank. You borrow at a set annual percentage rate, and loans are often structured similarly to those of a traditional business loan.
Rewards Crowdfunding
This is likely the most well-known type of crowdfunding. Made popular by sites like Kickstarter, funders are offered products, services, or other gifts in exchange for a set donation amount. For example, if I’m trying to fund my dog walking business, I might offer one hour of puppy snuggles to anyone who donates $50. For those donating $100, I might offer one hour of puppy snuggles plus a free grooming session.
INDIEGOGO offers both live crowdfunding campaigns and a marketplace for innovative products. It’s helped entrepreneurs raise over 1 billion dollars for more than 650,000 projects. Acquire starter capital and find out quickly whether your idea has legs with INDIEGOGO’s “global network of early adopters.”
And with this platform, you don’t have to stop raising money at a specific time. There are no fundraising targets or deadlines. Plus, you can apply equity, offer securities, revenue sharing, and even cryptocurrency sales.
INDIEGOGO charges a 5% platform fee for all projects. If you’re raising money for a cause, you won’t pay a dime on Indiegogo’s sister platform, GoFundMe.
Kickstarter
Kickstarter for SaaS
Kickstartercrowdfunding helps artists, musicians, filmmakers, designers, and other creators connect with the resources to bring their ideas to life. Since its launch in 2009, the company has helped 15 million people pledge $3.7 billion to successfully fund more than 143,000 projects. Funding is all or nothing, so you must meet the goal you set within the allotted time or everyone gets their money back.
It’s free to create a project on Kickstarter, but if it’s successfully funded, Kickstarter for SaaS applies a 5% fee to collect funds. There will also be processing fees between 3-5%.
An Experiment is a platform funding scientific discovery. From dinosaur fossil excavation to the historical study of medieval monasteries — Experiment backers will fund it if it “pushes the boundaries of knowledge.” The fund project scientists themselves, so there’s no overhead like the 50-60% that comes with a university grant.
It’s free to start a project, but once you receive full funding, the Experiment charges an 8% platform fee plus payment processing fees between 3-5%.
LendingClub provides personal loans up to $40,000 and business loans up to $300,000. LendingClub is not a bank. They connect borrowers with investors. In exchange for solid returns, investors purchase Notes that correspond to fractions of loans. LendingClub screens borrowers and facilitates all transactions. It is one of the best startup funding websites.
For business loans, get all your capital upfront, one-to-five year terms, no monthly payments, and no prepayment penalties. They recommend their loan program for large, one-time expenses. LendingClub also requires you to be in business for 12 months or more, have at least 50,000 in annual sales, no recent bankruptcies or tax liens, and ownership of at least 20% of the business.
Expect an origination fee of between 1.99 and 8.99% and total monthly payments per $10,000 borrowed of between $227 and $955 with total annualized rates of between 9.77% and 35.71%.
Crowdfunder
Crowdfunder
Crowdfunder is a community of 200,000 entrepreneurs and investors offering equity crowdfunding — which allows entrepreneurs to sell shares in their company to accredited investors. Their network of 12,000 VCs and angel investors has helped startups of all kinds raise money (Over $150 million) from Pre-Seed to Series A.
Crowdfunder offers Free, Starter ($299/month), and Premium ($499/month) plans – each with a variety of services, from document storage to personalized support.
Patreon
Patreon SaaS
Patreon allows artists, musicians, writers, and more to get paid by running a membership business for their fans. Providing a meaningful revenue stream, fans pay you a subscription amount of their choosing in exchange for exclusive experiences and behind-the-scenes content. Over $350 million has been paid to creators, and the average patron pays a monthly fee that’s more than most consumers pay for Netflix or Spotify.
Patreon SaaS takes 5% of successfully processed payments. There’s also a payment processing fee each time a payment is processed (usually batched at the beginning of each month). You can also expect payout fees charged for moving funds from your creator balance to your bank or PayPal account.
“Raise money for anything,” no raise requirements or startup fees involved. That’s what it says on the Fundly homepage. They fund everything from personal health needs to politics and even trips. Create a page, manage your campaign from the Fundly app, and use Fundly’s Facebook OpenGraph integration to maximize your reach. There’s no minimum amount to raise to keep your funds, payments can be withdrawn within 48 hours of the donation, and automatic transfers can be arranged.
Everyone pays a platform fee of 4.9% plus a credit card processing fee of 2.9% and $.30 per transaction (depending on your country).
Conclusion
The rapid growth and success of crowdfunding are only going to continue. Up to this point, most software startups have failed to take advantage of this growing movement. So, try out these crowdfunding platforms in India and find out which one works the best for you. Please let us know your views in the comments section.
Fundable is a crowdfunding platform that focuses exclusively on helping entrepreneurs and startup businesses to find funding. Businesses can participate in two types of crowdfunding, exchanging either rewards or equity for funding.
How do I start a crowdfunding platform?
6 Easy Steps to Create a Crowdfunding website:
Find a Crowdfunding niche as every new Crowdfunding website/platform is dedicated to a niche.
Use Crowdfunding technology (Search for the right technology that you want to use for your Crowdfundingwebsite).
Connect the payment gateway.
Add the content.
Launch the platform.
Market the platform.
What is Equity Crowdfunding?
Equity crowdfunding is the process whereby people invest in an early-stage unlisted company (a company that is not listed on a stock market) in exchange for shares in that company. Previously only wealthy individuals, venture capitalists, and business angels could invest in startups.
What are examples of crowdfunding?
Examples ofsuccessful SaaS crowdfunding sites:
Kickstarter.
GoFundMe.
LendingClub.
Indiegogo.
How much does it cost to use Patreon?
Patreon SaaS Lite takes the same financial cut as Patreon’s existing service: a flat 5 percent fee, plus the cost of payment processing. Pro and Premium are more expensive: Pro has an 8 percent commission, and Premium has a 12 percent one, with a minimum fee of $300 per month.
What is Patreon used for?
Patreon is used by YouTube videographers, webcomic artists, writers, podcasters, musicians, adult content creators, and other categories of creators who post regularly online. It allows artists to receive funding directly from their fans, or patrons, on a recurring basis or per work of art.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by ImpactGuru.
Would you have been able to imagine a crowdfunding startup to be able to meet all your healthcare needs? This is where ImpactGuru comes in. In a survey carried out by NSO in July 2017-June 2018, it was found that only 14% of the rural population and 19% of the urban population had health expenditure coverage. Again, according to an analysis published in The Lancet in 2018, around 1.6 million people in India die due to inadequate healthcare. The Indian healthcare segment is clouded by many such disturbing data. However, it is good to see that not just the Government, but many NGOs and startups are coming up to solve the long prevailing issues in the healthcare sector. Today we are talking about one such startup, that is making a remarkable attempt to make quality healthcare accessible even to the poorest, through crowdfunding. Mumbai-based ImpactGuru is not just helping people to raise funds for healthcare, but for various other social and personal causes as well.
In order to scale the fundraising for PPE for doctors, nurses and health care workers across India, ImpactGuru received INR. 40 lakh grant in the form of matching funds from The Action Covid-19 Team (ACT). The company added up to 20% in matching donations via the ACT Grant on every single donation for selected Public and Private Hospitals on its platform.
6th October 2021 – ImpactGuru witnessed a rise in people seeking financial help for treatment. Around 25,000 patients have been assisted so far by ImpactGuru and half of these patients were assisted post-January 2020.
2nd October 2021 – ImpactGuru has successfully crowdfunded over Rs. 75 lakh cumulatively contributed by over 700 donors in 2 weeks to cover treatment expenses of 2 brothers fighting Hunter’s Syndrome.
“An ImpactGuru is someone who envisions change, who finds solutions to social problems, who steps up to support another change-maker, who makes kindness a habit, who dares to follow his/her dream, or who simply helps out a friend in need. We believe that each individual holds the power to effect great change and given the right tools and the right backing, can become an ImpactGuru himself/herself ” quotes ImpactGuru CEO Piyush Jain.
ImpactGuru Logo
Starting a fundraiser campaign in ImpactGuru is easy. One just has to get started by clicking on the ‘Start a Fundraiser’ tab on the ImpactGuru website or app, fill in the required details to create the fundraiser campaign. Using ImpactGuru’s story builder feature, one can put up one’s cause of raising money in an appealing way to attract more donors.
Once created, the fundraiser campaign is shared online. The money received from the donors is transferred to the beneficiary’s account after deducting the applicable fee and charges.
Fundraising on ImpactGuru
ImpactGuru – Industry Details
India’s private healthcare spend stands at $90 billion a year. Of this, merely one-third is covered by insurance and the balance of $60 billion is met largely with borrowings from friends and family. Capturing 10% of this segment would mean a medical crowdfunding market of around $6 billion. This is the segment ImpactGuru is looking to tap.
Healthcare crowdfunding is the most disruptive solution to address this problem. There are no loans or interest to be paid off when it comes to crowdfunding as funds raised online is considered as a donation.
ImpactGuru – The Idea of Starting up
The idea began to form in Piyush’s mind while he was working with Instilgo, a US-based non-profit organization.
“When I decided to go to Harvard University, Kennedy School of Government, I found my calling when I accepted a fellowship with Instiglio, a US non-profit focused on using social impact bonds to help non-profits scale” recalls ImpactGuru founder PiyushJain.
Besides, while at Harvard, Piyush assisted his Professor in teaching a class on financial management in non-profit Organizations. He also co-authored a paper on – ‘Non-Equity Financing for Entrepreneurial Ventures’. For writing the research paper, Piyush had to explore different avenues to finance social initiatives. During this research, Piyush realized that the crowdfunding market in Indian is largely untapped and it is his willingness to do something in the field of crowdfunding that made him start ImpactGuru.
Fortunately, both Khushboo and Piyush shared the same vision. Piyush’s knowledge of finance and technology clubbed with the brand, marketing and communications skillsets of Khushboo had garnered over the years. It does require a fantastic partnership and they have been very lucky to forge that successfully.
The startup was incubated at Harvard Innovation Lab in August 2014 and at PACT, Singapore in May 2015.
Impactguru founders – Khushboo Jain and Piyush Jain
ImpactGuru was founded by a couple of entrepreneurs, Piyush Jain and Khushboo Jain.
ImpactGuru founder and CEO Piyush Jain is a BSc in Economics from the University of Pennsylvania – The Wharton School. He did Masters in Public Policy, Business and Government Policy from Harvard University, John F. Kennedy School of Government. Piyush worked with reputed organizations like JP Morgan, Instiglio, San Francisco based fintech firm SoFi, the Boston Consulting Group and RB Investments, before starting ImpactGuru in 2017.
ImpactGuru co-founder and COO Khushboo Jain come from a fashion designing and fashion marketing background. Khushboo is an alumna of London College of Fashion, University of Arts London and Parsons School of Design. Khushboo did her Bachelors in Commerce from Sydenham Institute of Management Studies, and an MBA from Welingkar Institute of Management. Prior to joining her husband in his venture, Khusboo worked with brands like Kansai Nerolac Paints Limited and fashion brands like TheLabelLife.com and Manish Malhotra.
Piyush is backed by an awesome and dedicated team who truly stand with the vision and mission of ImpactGuru. Some core members of the ImpactGuru team are-
Vikas Kaul, the Chief Product Officer of ImpactGuru is an IIMK graduate. He is an ex-employee of Quikr and Deloitte.
Ankita Kumari is Vice President, Operations at ImpactGuru. She is an engineering graduate from Amity University Noida and an ex-employee of PSTakeCare and TinyOwl.
Sandeep Tripathy – Head, Business Development, Ex- PSTakeCare, IIT Bombay.
ImpactGuru – USP
What makes ImpactGuru stand out is that they are the only crowdfunding platform to have their own story builder to help customers write great stories as it’s a major pain point in the industry today. It has an AI-supported story builder for medical fundraisers, with a template for all campaigners to develop their own standardized campaign stories. It’s a first in the world innovation in crowdfunding globally!
ImpactGuru is also the first crowdfunding player in India to launch a smartphone app for customers. The app presents the user with a quick view of their fundraiser, thus enabling them to keep track of the progress of the campaign, get real-time donation notifications and post updates.
ImpactGuru.com has become the largest crowdfunding platform in India for medical expenses. In total, ImpactGuru has raised around INR 950 Crore from over 2 lakh donors from 150 countries.
ImpactGuru – No Platform Fee
ImpactGuru has extended free fundraising to all causes by offering a 0% platform fee. It has Mobilized $200 million/INR.1500 crores through its platform and global partners, since inception.
Free fundraising is made available to all types of fundraisers who are hosted on the platform – It can be patients with medical emergencies (Covid-19, organ transplant, cancer) or NPOs/Individual fundraising programs for any causes. By this, ImpactGuru has completely waived off-platform fees with an intention to maximize the funds raised by fundraisers.
In order to sustain the platform and meet operational activities to provide a free fundraising platform, donors will be asked to provide any amount of voluntary tips.
In a joint statement ImpactGuru.com’s Co-Founders Piyush Jain and Khushboo Jain said, “In the last 5 years, crowdfunding on ImpactGuru has now become the preferred way for people to finance critical illness bills at hospitals given the low level of insurance penetration in India. With the extension of our free fundraising options to all fundraisers, we hope to accelerate our ambition of helping finance the critical illnesses of over 1 million / 10 lakh patients over the next decade.”
ImpactGuru – Business and Revenue Model
But how does ImpactGuru make money? It has a highly scalable, asset-light, transparent revenue model. It charges an average of 8% of total funds raised as to its fees with 5% directly being net revenue. It charges additional fixed fees for premium services such as digital marketing, video, content support.
I was keen on a business model that would add value and meaning to the community. Our vision is to make sure that nobody in India has to ever struggle to fund their medical treatment due to lack of money. – Piyush Jain
ImpactGuru offers various packages that one can opt for fundraising.
ImpactGuru – Challenges Faced
Social problems are so immense in India, that often one can get disillusioned by the impact one creates i.e. whether one’s intervention is moving the needle or not. There are many challenges and dilemmas that the ImpactGuru team needs to face on a day-to-day basis. This is what Piyush has to say regarding the issues the team faces-
At ImpactGuru, we often face an ethical dilemma. Private hospitals will not proceed with treatment without the funds, say of 5 children whom are near death without a critical emergency surgery. It is an overwhelming feeling as we will be disappointing someone or maybe more as we have limited resources as an organization and limited donors to reach out to fund each of the 5 surgeries successfully. How to handle the mental pressure and how to execute the task is the pressing concern. It’s very important to keep the perspective that the journey of a thousand miles begins with a single step. We thus pick cases where we can have the maximum impact given the short time. We select cases such as transplant, heart surgeries, cancer rather than dengue, malaria, diarrhoea.
ImpactGuru has raised a total of $4.5M in funding over 5 rounds. Their latest funding was raised on Mar 6, 2020, from a Seed round.The ImpactGuru funding details are mentioned below:
Date
Stage
Amount
Investors
April 2016
Pre-Seed Round
$500K
RB Investments Pvt Ltd (Singapore based VC Fund)
November 2017
Seed Round
–
Venture Catalysts
May 2018
Series A
$2Million
Apollo Hospitals Group, Currae Healthtech Fund, RB Investments, Shorooq Investments, Venture Catalysts with participation from various other investors from the USA, Southeast Asia, and the Middle East
December 2018
Series A
$2Million
Shorooq Partners
May 2020
Seed Round
–
Rajesh Mane
ImpactGuru – Partners
ImpactGuru has a strategic partnership with GlobalGiving.org, the world’s largest non-profit crowdfunding platform based in the US and UK in October 2016. It is the only crowdfunding platform in the world that can offer Indian, US, and UK tax benefits to Indian and international donors.
ImpactGuru team with GlobalGiving
ImpactGuru has also partnered with Apollo patients nationwide which makes it the preferred crowdfunding platform for all.
Recently, in early July 2021 Cure SMA Foundation of India, a public charitable trust has collaborated with ImpactGuru. The partnership is to support all its registered SMA patients in India.
In April 2016, ImpactGuru partnered with Fundnel, an investment platform based in Singapore. This partnership allowed ImpactGuru to tap into philanthropic and investment capital from the Indian diaspora based in Southeast Asia.
In September 2016, ImpactGuru partnered with UN Women (an entity of United Nations) to run Project Inspire, an initiative to support social entrepreneurs working for women empowerment.
ImpactGuru – Awards and Achievements
ImpactGuru has won the following awards worldwide.
Khushboo Jain featured as a Leading Woman in Business 2021 List by The Economic Times & Femina.
Khushboo Jain was recognized as Social Activist For Indefatigable Service During Covid-19 Crisis by the Punjab Govt. Dept Of Health & Family Welfare.
Piyush Jain featured in 2021 List of Nationwide Awards 40 Under 40.
Awarded as Best Social Impact Startup by Drivers Of Digital Awards.
Awarded as Best Digital Startup by Drivers Of Digital Awards.
Piyush & Khushboo Jain featured in 2019 List of Fortune India 40 Under 40.
NITI Aayog & United Nations – 2019 Women Transforming India Awards featured Khushboo Jain in Winning Top 15.
Recognized among top 5 startups in India and raised investment funding on live TV on Tie The Knot: Real Funding, Unreal Speeds, CNBC TV18’s longest-running shows – Young Turks.
ImpactGuru was declared the winner of Maharashtra Startup Week 2019, organized by the Maharashtra State Innovation Society.
BusinessworldTectors Awards 2018 – Tech Companies To Watch Out For.
TechCircle 2018 Public Choice Award for Best Social Impact Startup award.
MedAchievers HEALTH NXT 2018 Rising Startup Award.
2018 Top 3 Startups in West Zone, Start Smart Awards 2018.
Businessworld BW Disrupt Social Woman Entrepreneur Award.
Expanding business in Middle East markets is the next on the cards with the help of some investors from the region who have recently invested in the company.
I’m on a mission to make healthcare accessible to all and save more lives and cast the ImpactGuru net across geographies.
ImpactGuru – FAQs
What is ImpactGuru?
ImpactGuru is a Mumbai-based crowdfunding startup that offers a platform to raise funds for healthcare to social enterprises, NGOs, startups and individuals.
Who is the founder of ImpactGuru?
ImpactGuru was founded by a couple of entrepreneurs, Piyush Jain and Khushboo Jain.
How does ImpactGuru make money?
ImpactGuru charges a minimum of 5% fee on the funds raised by individuals on the platform.
What is ImpactGuru funding?
ImpactGuru has raised a total of $4.5M in funding over 5 rounds. Their latest funding was raised on Mar 6, 2020, from a Seed round.
What documents are required to run a fundraiser on ImpactGuru?
NGOs: If you’re raising funds for an NGO, you will be required to submit your 12A certificate and 80G certificate. If you wish to receive foreign donations please also share your valid FCRA certificate.
Individuals (medical causes): If you’re an individual looking to raise funds for medical expenses you will be required to submit the patient’s identity details, test reports and invoice (if any), hospital/clinic name doctor’s name & contact details, beneficiary’s bank account details.
Individuals (other causes): For individuals looking to raise funds for other personal causes please share your identity proof and bank account details. It would help your fundraiser if you could provide any other documents that would validate your fundraising need.
Is ImpactGuru a legitimate site?
Yes, ImpactGuru is a legitimate and legal site.
Is ImpactGuru genuine?
Yes, all the cases are genuine. ImpactGuru itself verifies them to make sure that their platform is safe for both campaigners and donors.
Having trouble looking for a funding platform that will fund your creative project? Not being able to generate investors for funding? Waiting to kickstart your business but not being able to due to finance? Kickstarter, a New York-based public-benefit corporation might be the solution that you are looking for.
Kickstarter is an American company with its headquarters based in New York. Kickstarter helps creators start their projects by getting them what they need i.e. Finance. With the mission to help people who have creative projects become a reality Kickstarter has become a significant platform.
Kickstarter promises its users top-notch services along with several benefits. Being an American company, Kickstarter’s services can be availed by those countries that Kickstarter is being operated. Users must possess either a debit or a credit card.
Kickstarter is a medium to connect creative workers and investors. The campaigns done by Kickstarter aim to make imaginations or ideas into reality. Creators share their idea on the platform and communities help to fund the project.
Since its foundation in the year 2009, Kickstarter boasts when it comes to numbers. With tight competition, Kickstarter has successfully funded more than 200,000 projects so far. This might sound a small amount but it is a great achievement.
Kickstarter’s Areas Of Operation
Kickstarter has its operations in several countries. You can create a project if you are from the US, UK, Canada, Australia, New Zealand, Netherlands, Denmark, Ireland, Norway, Sweden, Germany, France, Spain, Italy, Austria, Belgium, Switzerland, Luxembourg, Hong Kong, Singapore, Mexico, Japan, Poland, Greece, and Slovenia.
However, people living in any other country apart from the above-mentioned ones can use their services and can create a project. But, Kickstarter has a strict policy of projects that can be a part of a creative project.
Kickstarter’s Services
Kickstarter’s services are not open for every type of idea. Kickstarter’s services include giving your idea a marketing platform. Anyone with a potential business idea or a creative project can get direct attention from different social media platforms.
It is the backers that back a project by funding them to help an idea become a reality. The creators in return offer certain rewards to the backers which can be a copy of what will be produced. Kickstarter is not an offline store where you can go for funding.
Kickstarter will not charge any amount until and unless the project reaches its funding goal. Once the project has been funded successfully Kickstarter charges a 5% fee on it.
Kickstarter does not have a target audience per se because anyone with a keen interest to back a project can become a part of the Kickstarter. According to Kickstarter target demographic, the audience for Kickstarter comprises 78% men and 22% women.
People who are around the age of 25-35 are the most common visitors to Kickstarter. It is the creators sharing their ideas who need the audience because they would generate funding. With the help of behavioral targeting, one can connect with real people.
These people with whom you can get connected are the ones who have supported projects like yours. The project that you have created on Kickstarter will recommend people who have backed similar projects like yours through advertisements.
Behavioral targeting is one of the most popular types of marketing for Kickstarter. So, if you have a creative idea on your mind then someone with similar interests might back you. As mentioned earlier that Kickstarter has helped more than 200,000 projects with their funding.
Most people wonder how does a crowdfunding platform earns its revenues. Crowdfunding companies work on a commission-based format where the company charges a certain amount of money from its users and some amount for the transaction.
The business model of Kickstarter is multi-sided. If you look at Kickstarter’s earning process and method then you might think that the company earns its revenues by charging certain commissions from its users.
Well, if you think that then you are correct because it charges a 5% commission on the total funds raised. The business model of Kickstarter works on two interdependent customer segments. The two segments include the creators and the backers.
Advertising done by Kickstart is mainly done through social media. Campaigns done by the company are efficient and encourages people to share about Kickstart. A creator’s project will be flooded all over social media, emails, live events, press contacts and many more by Kickstarter so that more audiences get to know about the project.
What is so unique about Kickstarter?
Kickstarter promises its users a unique experience. The company ensures a successful campaign where creators can benefit from the following things:
Getting seed capital
Can keep the stake of ownership
Early feedback on projects so that optimizing can be done
Exposure to the social environment
Kickstarter is not into funding treatment or any other such kinds of things. It takes an active part in promoting projects on categories like games, films, music, art, technology, and many more. If you are interested in any of these categories then you can use the services of Kickstarter.
How Does Kickstarter Make Money?
Kickstarter charges a 5% commission fee on the total funds raised. However, they charge a certain amount for payment gateway. The company uses this money to run its site which includes advertising and employee payment.
Kickstarter uses Amazon to collect their payment that is entered by the backers. Whenever a goal for a particular fund is met Kickstarter charges some amount of money.
Conclusion
Kickstarter’s services are one of the best and as a crowdfunding platform, you cannot expect more than your project being marketed for free. This is something that not many companies do. Well, a public-benefit company will do what they do the best and that is help people.
FAQs
What kind of industry is Kickstarter in?
Kickstarter is a crowdfunding platform that is into financial services on internet.
What are the advantages of using Kickstarter?
One can get the following benefits for using Kickstarter:
StartupTalky
