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Casestudies

Case Studies 3

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Livspace

LivSpace is an end-to-end home design community platform bringing together home owners, interior designers, furniture/decor manufacturers and suppliers. It approached debt as a source of additional flexibility, to have a level of ‘insurance’ in case of unpredictable deviations from its business plan. Post demonetization, the demand for interior design and home improvement was temporarily affected, leading to some of these deviations.

We advised Livspace to consider debt at around the same time that it raised equity from some marquee VCs like Bessemer Venture Partners and Jungle Ventures. Timing the debt along with the round allowed an availability of higher debt, and a bigger cushion for the company in an ever-changing market.

Using debt gave Livspace the ability to continue on its growth trajectory – the company could double down on investments in its team and partner designer network, without an undue pressure on cutting costs or scaling back aspirations. This enabled a substantial improvement in the company’s ability to bring in the right equity partners at the right terms in subsequent rounds of fund raising.

Case Studies 2

By Casestudies

Box8

Box8 is a multi-product food delivery brand catering to Indian delicacies at an affordable price. The Box8 founders focused on capital efficiency – maintaining the right balance of debt and equity to finance growth. Their requirements were to invest significant capital in new kitchens while not using only equity. Due to the fast-changing environment, Box8 felt the need for speed and flexibility from a financing partner.

We invested venture debt capital in Box8, spreading this investment across multiple tranches to optimize the interest paid, while matching flows of capital to the needs of the business. We also extended follow-on support to help manage refurbishments of some existing kitchens in the Box8 network.

Box8 is now one of the rare capital efficient food-tech companies which has broken even, and has used venture debt innovatively to fuel growth in new locations as well as existing locations. This growth led to significant improvement in the business valuation, assisting the promoters and investors to raise equity on more favourable terms.

Case Studies 1

By Casestudies

Big Basket

Big Basket is India’s largest online food and grocery store. As it grew, the company planned to expand its warehousing and supply chain infrastructure, as well as ramp up inventory. Its existing source of capital was equity, which came at a capital cost of more than 30%. Further, the founding team wished to avoid increased dilution.

We worked with the Big Basket team to structure a debt instrument that had a moratorium tailored to meet the cash flow needs of the company. We also provided continued support with follow-on investments as the company grew rapidly and its capital requirements increased. True to being a long-term, value added partner, we helped Big Basket partner with financial institutions and banks for additional financing solutions.

As a resultant, the founders were able to retain a higher stake, and Big Basket could finance its capital requirements optimally with an appropriate mix of debt and equity.