Bootstrap Financing: Overview, Advantages and Disadvantages
Explore the concept of bootstrapping as a funding avenue, outlining its advantages and disadvantages.
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Finding the right funding partner is like finding a soulmate. It is not a decision to be rushed.
To assist your search for business funding, Choco Up has compiled a list of promising revenue-based financing companies across Europe, America and Asia (this list includes Choco Up, of course).
We also explain some factors that you should consider when choosing a revenue-based financing company to work with.
If you haven’t found a soulmate to accelerate your business growth, this list could be a helpful guide. Let’s get started!
If your business is based in Europe or America, following are some revenue-based financing companies that you could work with.
On the other hand, if you are looking for a funding partner in Asia, feel safe to skip to the next section of this article.
Headquarters: New York City, the United States
Sector: Mobile apps and games
Funding amount: $10K to $10M
*All dollar amounts in this article are in USD unless otherwise specified.
Braavo is a New York-based company which provides revenue-based financing, receivables factoring and analytics for mobile apps and games.
Accelerate is the receivables factoring arm of Braavo. Through advance payments on your app revenue, it solves problems caused by the long payment cycles of Apple’s app store.
The revenue-based financing arm, Extend, is designed for facilitating user acquisition. You will be opened up to funding for growing your app business at a fixed percentage fee.
Headquarters: Toronto, Canada
Sector: E-commerce, mobile apps and SaaS
Funding amount: Up to $10M
Having invested a total of $2.5 billion in over 6,500 companies, Clearco is straight up one of the largest revenue-based financing companies in North America.
Clearco is a passionate advocate of equality. According to their press release, 30% of Clearco’s portfolio involves people of color. They also fund 8 times more female founders than traditional venture capital firms.
Who can apply for funding?
Operating history: At least 6 months with revenue
Minimum revenue: $10K per month from connected sales platforms
There is also a geographical restriction on who is eligible for Clearco’s funding. You can receive funding from them only if your company is incorporated in one of the following countries:
Headquarters: Toronto, Canada
Sector: Tech and SaaS (but open to other high-growth sectors)
Funding amount: $1M to $7M
Flow Capital is a revenue-based financing company which operates on a relatively modest scale.
Its portfolio currently covers around 50 companies across the United States, Canada and the United Kingdom. If your business is headquartered outside of these regions, you will have to look for alternative funding partners.
Who can apply for funding?
Operating history: No strict requirement
Minimum revenue: $4M (annual revenue) or $2.5M (annual recurring revenue)
Headquarters: Seattle, the United States
Sector: Tech only (software, SaaS, tech services, etc.)
Funding amount: Up to $3M
Lighter Capital is another company providing growth capital through non-dilutive means. Their financing solutions include term loans, lines of credit and revenue-based financing.
Who can apply for funding?
Operating history: No strict requirement
Minimum revenue: $15K monthly recurring revenue
Similar to those revenue-based financing companies discussed above, Lighter Capital has geographical limitations on who can apply for funding. Your company must be based in Australia, Canada or the United States (or be a subsidiary there) in order to apply.
Headquarters: Sevenoaks, the United Kingdom
Sector: Businesses with online models (e-commerce, subscription, D2C, mobile app or SaaS)
Funding amount: $10k to $5M
Established in 2019, Uncapped is relatively new to the revenue-based financing scene. The company is built by founders for founders, offering funding for business owners who want to:
There is one special feature about Uncapped’s financing services. Different fees (6% to 12%) apply to funding obtained for different purposes. So you would be incurring a different cost of capital depending on how you use the funding.
Who can apply for funding?
Operating history: At least 6 months
Minimum revenue: $10K monthly revenue
Headquarters: Milan, Italy
Sector: Businesses with online models (e-commerce, SaaS, marketplace, subscription or apps & games)
Funding amount: €10K to €1M
(approximately $11K to $1.1M in USD)
Interestingly named after a dictionary word, Viceversa was born in 2020 with a vision to revamp the European funding landscape.
They offer rather niche services, as their funding primarily serves digital companies who wish to amp up on online advertising.
Viceversa also charges differently from some other revenue-based financing companies. Instead of taking a percentage fee (e.g. 8% of funding as the fee), they require you to repay a multiple (1.05X to 1.10X) of the funding obtained.
Who can apply for funding?
Operating history: At least 6 months
Minimum revenue: €10K monthly revenue
(approximately $11K in USD)
Headquarters: Dublin, Ireland
Sector: E-commerce
Funding amount: $10K to $20M
Wayflyer specializes in helping e-commerce companies grow their business.
If you obtain revenue-based financing funding from Wayflyer, an analytics platform is also available to you as part of the package. The platform provides marketing-related insights and recommendations, helping inform and improve your company’s strategic decisions.
Despite being a relatively young company (founded in 2019), Wayflyer has quickly extended their reach across continents. You may apply their funding if your company is incorporated in any of the following regions:
Who can apply for funding?
Operating history: At least 6 months
Minimum revenue: $20K average monthly online revenue
Revenue-based financing entered the Western financial landscape as early as a decade ago. While non-dilutive growth funding remains a rare commodity in Asia, it is not totally out of reach.
Below is a list of revenue-based financing companies which could supercharge your Asia-based business.
Based in: Singapore and Hong Kong
Sector: Startup, E-commerce, SMEs
Funding amount: $10k to $10M
Having funded businesses in more than 10 markets and 10 sectors in Asia Pacific, Choco Up is Asia’s leading revenue-based financing platform.
We take pride in our data-driven approach to business funding, as well as the values and social impact created by our partners.
During the COVID-19 pandemic, for example, we became the growth and funding partner of BuyHive, a sourcing platform which connects buyers to reputable manufacturers.
With $1.5M funding from Choco Up, BuyHive was able to secure oxygen concentrators and other critical goods needed in India and other countries hit hard by the virus.
The funding process at Choco Up was “transparent and fuss-free”, according to BuyHive’s CEO Minesh Pore. It was mostly thanks to our proprietary fintech platform that funding was made available in just a few days.
Who can apply for funding?
Operating history: At least 6 months
Minimum revenue: $10K per month
If you are looking for growth capital for your company, click here to get your preliminary offer today! It is free and takes only a few minutes.
Based in: Mumbai, India
Sector: E-commerce, D2C, SaaS and gaming
Funding amount: $20K to $500K
Based in India, GetVantage is another company which offers growth capital through revenue-based financing. It was founded by fintech veterans with a vision to help entrepreneurs.
Although they technically provide funding to both traditional and e-commerce businesses, there is a requirement that at least 40% of your sales must be processed online.
Another point to note about GetVantage is their funding range (up to $500K). The amount you can get from each funding tranche is comparatively limited.
Who can apply for funding?
Operating history: At least 12 months with revenue
Minimum revenue: $20K per month
Based in: Bengaluru, India
Sector: Many
Funding amount: INR $500K to $20M
(approximately $6.6K to $267K in USD)
Klub is a revenue-based financing company in India. Compared with their peers, Klub is less selective about the sectors that they put funding in.
Their portfolio companies come from a broad range of industries, such as:
One thing to note about Klub is that they charge different fees depending on how you use the funding. For example, obtaining funding for growth comes at a higher cost than for inventory purchase.
It is also worth noting that Klub currently only funds business entities that are incorporated and operational in India.
Who can apply for funding?
Operating history: At least 12 months with demonstrated revenues
Minimum revenue: No standard requirement (but they will assess your business with a Klub Score to determine your eligibility for funding)
Based in: Mumbai, India
Sector: Any
Funding amount: INR $10M to $150M
(approximately $13K to $2M in USD)
N+1 Capital is run by a small team of serial entrepreneurs and financially backed by some angel investors.
Unlike most other revenue-based financing companies, N+1 Capital does not indicate favors with certain industry sectors, meaning that businesses from all industries can apply for their funding.
That being said, N+1 Capital’s other requirements are quite specific. If you are interested in obtaining funding from N+1 Capital, below are some boxes you need to check:
Who can apply for funding?
Operating history: No strict requirement
Minimum revenue: INR $120M in the past financial year
(approximately $1.6M in USD)
Based in: Bengaluru, India
Sector: E-commerce and D2C
Funding amount: INR $500K to $30M
(approximately $6K to $400K in USD)
Velocity has a focus on the e-commerce industry. Its financial services are therefore tailored for online businesses.
Like Choco Up, they have e-commerce integrations (e.g. Google Analytics and Shopify) to facilitate the application and funding process.
Given its young age (Velocity was founded in 2020), the Indian startup has made pretty good headway with its financing products.
They have worked with companies from a broad range of sectors (from food and beverages to apparel and footwear), but funded businesses remain largely local to India.
Who can apply for funding?
Operating history: At least 8 months with revenue
Minimum revenue: INR $500K monthly revenue
(approximately $6K in USD)
No one in the world is a perfect soulmate for everyone. Likewise, a funding partner must be handpicked by you, the business owner, to fit your needs and financial situation.
Here are some factors to help you determine which revenue-based financing company works best with you.
The majority of revenue-based financing companies only provide funding to businesses located in their regions of operation. You will be disqualified right out of the gate if your company is based somewhere far away from your potential funding partner.
For example, applying to Clearco (in North America) would be difficult when your business is based in Singapore. A more sensible option is to work with Clearco’s Asian counterpart, such as Choco Up.
Next, check whether the revenue-based financing company covers your business sector.
While not every funding provider is as niche as Braavo (focusing on mobile apps only), most of them specialize in certain business sectors.
Knowing the speciality of different companies not only helps you get past the eligibility threshold, but also ensures that you find a growth partner who truly understands your business needs.
Also check the qualification requirements before applying for funding. Common requirements involve operating history and your company’s revenue.
Make sure you meet the criteria, or else you will be waiting for a reply that will never come.
Revenue-based financing is on its way to become Asia’s new favorite method of business financing. India, for instance, witnessed the boom of many revenue-based financing companies in the past few years.
But before young companies turn sophisticated, it is important to do your part of due diligence over the funding partner that you wish to work with. News, press releases and client success stories could be indicators of whether the companies are reliable and trustworthy.
When you obtain funding via revenue-based financing, check not only the cost of capital (usually in the form of fixed rate fee).
Also find out about how much (in %) of your business revenue you need to share in a month. The revenue share percentage has profound impacts on how you manage your cash flow in the coming months.
Learning about these figures at Choco Up is easy. Simply connect your sales and analytics on our data integration platform, and you could get a preliminary offer in minutes! Click here to try it out.
Different revenue-based companies provide funding on different terms. Before you sign on the term sheet, make sure your have the following questions answered:
Revenue-based financing (RBF) should not require any collateral. This is precisely how it differs from a loan.
If a ‘revenue-based financing company’ asks for collateral to secure the funding, think twice and consider whether you are really getting RBF funding or a loan.
Learn more: Revenue-Based Loan Explained: Is It Really a Loan?
At Choco Up, we celebrate the success of every founder as much as it is our own.
We have funded more than 100 companies, and we always provide plans and recommendations tailored to the needs of each business.
We do this because we care, and we believe this is what a growth and funding partner should do.
To learn more about how Choco Up could help your business grow, check out our client success stories or apply for funding now!
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