Recur Club, a recurring revenue-based financing company, has allocated $15 million in funds to Indian start-up founders affected by the Silicon Valley Bank crisis.
The company will not charge platform fees on this, it said.
While the exact number of Indian start-ups with SVB accounts is not known, more than 50 per cent of Indian SaaS companies are estimated to have a US presence, a majority of which were banking with SVB.
It is safe to assume that over 1,000 Indian start-ups have been directly affected by the SVB fiasco, and many more are likely to be indirectly affected. The affected companies range from early stage to late growth stage, the company said.
According to the co-founder of the Recur Club, Eklavya Gupta, the incident underlines the criticality of diversification, be it customers, banking, or investors. More than 100 start-ups have approached it for immediate payroll financing and managing short-term expenses.
Many of the companies had SVB as the sole bank account or had a majority of liquidity parked with it. Caught in the crisis, they are now forced to arrange a banking partner, as well as liquidity to sustain operations.
Fintechs such as Recur Club provide start-ups instant non-dilutive financing solutions to fund their payroll and short-term working capital requirements, within 48 hours of receiving the companies’ data and without diluting equity.
In addition, it is also facilitating opening bank accounts in GIFT City within 24-48 hours, by taking special exemptions, it said.
It currently works with companies that have a predictable annual revenue of at least $100,000 from existing customers of greater than one year of vintage, and more than three months of runway. Recur Club has funded more than 300 companies, said the company.