Crowdfunding offers a new way for start-up funding, thereby providing investors with an ownership stake in the company. It is an attractive option for start-ups as it allows them to bypass traditional channels and reach out to potential investors or people who are interested in their idea. Equity Crowdfunding is more accessible than conventional methods of start-up funding. It offers entrepreneurs an opportunity to connect with investors who share their values and vision.
Process of Equity Crowdfunding
Equity Crowdfunding allows start-ups to raise funds from investors by selling shares of their company through an online platform. These start-up funding platforms can be either open or closed, depending on the type of investor they allow to invest in their ventures. Entrepreneurs create an online campaign with their business plan and pitch it to the public. Investors can then contribute any amount they want in exchange for shares in the company.
5 Indian Companies that Raised Start-up Funding Through Equity Crowdfunding
The Indian start-up ecosystem has been thriving with the help of equity Crowdfunding platforms. These platforms have provided the much-needed start-up funding with an opportunity for investors to put money in promising companies. In this blog, we have listed the five popular companies in India that raised funds through Equity Crowdfunding.
- OYO Rooms: Oyo Rooms provides budget-friendly hotels to customers. They are present across 100 cities and raised $250 million in their Series D round of start-up funding by Softbank Group’s Vision Fund in 2017. The other significant investors include Alibaba Group Holding Ltd., Sequoia Capital, Greeanoaks Capital, Lightspeed Venture Partners, and Hero MotoCorp.
- Unocoin: Unocoin is a bitcoin company that provides a platform for buying, selling, storing, and spending bitcoins in India. It raised $1 million in funding from Indian and U.S. investors in 2015. The funding round was driven by Blume Ventures, an early-stage investor. Besides it, the funding also came from Mumbai Angels, Ah! Ventures, Digital Currency Group, FundersClub, Boost V.C., and Bank to the Future.
- Urban Ladder: Urban Ladder is an online furniture store that offers home furnishings and decor. They raised $5 million in their Series A round of funding in 2013 from SAIF Partners and Kalaari Capital. The online furniture brand aimed to utilize the start-up funding to expand the product line and develop a technology-driven platform.
- MobiKwik: Founded in 2009, MobiKwik is a digital payments app that allows users to recharge or pay bills for electricity and mobile. Likewise, it facilitates services such as money transfer and booking bus tickets. This Fintech start-up raised $35.4 million through a Series D funding round led by Bajaj Finserv Limited.
- Big Basket: Big Basket is an online grocery store that raised $150 million through equity funding in 2018. The financing round was led by Mirae Asset of South Korea, CDC Group of U.K., Alibaba, and Naver Asia Growth Fund. This start-up funding boosted Big Basket’s valuation to around $1 billion, making it a unicorn in the segment.
Conclusion
Equity Crowdfunding is an excellent way for start-ups to get funding without having to go through banks or venture capitalists who often have high requirements for their investments. Thus entrepreneurs can get start-up funding conveniently, which can be otherwise difficult if they do not have the necessary qualifications or connections.