Partner Performance Report

Lease financing has been known for many years, but it was predominantly offered to large companies like Reliance Industries by NBFCs and other financial institutions. In 2020, Grip Invest brought this offering as an investment product for individual investors- from young working professionals to millennials. 

Since its inception, Grip Invest has partnered with 70+ venture-capital-backed, high-growth companies to enable asset-backed financing through two investment products: (i) lease financing and, more recently, (ii) inventory financing. 

This report provides insight into the overall breakup of investments and the financial performance of these partners. It is based on the financial data of FY22. 

Breakup Of Investments

The Lease and Inventory Financing opportunities are spread across a diversified range of products comprising electric vehicles, furniture, apparel, warehouse equipment, etc.

The partners, such as Udaan, Furlenco, Battery Smart, Stanza Living, Blue Tokai, etc., represent an equally diversified range of industries. 

Grip Invest has enabled investments of INR 195 Cr through Lease Financing and INR 32 Cr through Inventory Financing for these companies and returned INR 67 Cr in lease receivables to investors. 

The sector-wise breakup of investments made on Grip Invest’s platform is shown below.

Revenue Analysis

The partners reported a total revenue of nearly INR 2,600 Cr, which represented a growth of 62% in FY22 (vs. FY21). 

Ninety-six per cent (96%) of the partners have seen a growth in revenue during FY22 (vs FY21). Income for 24 of Grip’s partners grew by more than 150% in FY22. 

Revenue for 44% of partners grew by more than 150% in FY22 (vs. FY21). Only 3.6% of partners reported a decline in revenue in FY22 (vs. FY21), and they did so on account of downsizing some of their loss-making verticals to improve profitability.

_{Based on the FY22 data received as of 9 May 2022}

EBITDA Margin

_{Based on the FY22 data received as of 9 May 2022}

• 67% of partners have seen an improvement in their EBITDA margin, whereas 33% have seen a contraction in the EBITDA margin
• Margins improved due to various cost-saving measures adopted by the companies (such as downsizing loss-making verticals, centralising operations resulting in reduced overheads, etc.). Higher revenue (supported by new product launches, expansion across geographies, etc.) also improved margin.
• Contraction in margins was on account of higher direct cost (material cost) and indirect cost (primarily employee benefit expense; most of these companies increased their staff headcount due to expansion)

Factors Attributing To The High Performance of Partners

• Presence in certain sectors which have strong underlying business drivers is seeing outperformance as opposed to a broader industry (on account of the adoption of new technology and changing consumer behaviour); e.g., adoption of electric vehicles, secular growth in e-commerce, and a shift in consumption patterns to subscription model (versus the ownership model). 
• Focus on partners with B2B business models with long-term, fixed price/quantity contracts from well-established enterprise clients. Within the B2C space, companies with strong customer loyalty and the ability to diversify and expand their product offerings have outperformed their peers.
• High-quality management teams, backed by marquee investors, could raise additional capital to finance their operations and growth.
• Since most of these partners are early-stage growth companies, the increase in scale of operations, expansion of business across multiple geographies, and increase in customer base have been the growth enablers.

Capital Raised

Grip Invest’s partners have raised more than $400 million of equity and ~$66 million of debt in FY22 from marquee financial institutions such as Sequoia Capital, Elevation Capital, Qualcomm Ventures, Accel Partners, CLSA Capital Partners, Alteria Capital, Chiratae Ventures, Anicut Capital, Y-Combinator, Blacksoil, Northern Arc, Innoven, etc.

While there have been isolated instances of 1-2 days of delay in payments from a few partners, Grip has ensured that investors continue to receive timely returns through the credit enhancement package put in place, which includes (but is not limited to) a security deposit from the partners. 

To Conclude

Most portfolio companies are fundamentally strong and competitively placed to ensure business continuity and growth. Grip Invest will continue to monitor the performance of its portfolio companies and endeavour to maintain a low default risk while exploring new opportunities for its investors. 

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Disclaimer - Investments in debt securities/municipal debt securities/securitised debt instruments are subject to risks including delay and/ or default in payment. Read all the offer related documents carefully. The investor is requested to take into consideration all the risk factors before the commencement of trading.
This communication is prepared by Grip Broking Private Limited (bearing SEBI Registration No. INZ000312836 and NSE ID 90319) and/or its affiliate/ group company(ies) (together referred to as “Grip”) and the contents of this disclaimer are applicable to this document and any and all written or oral communication(s) made by Grip or its directors, employees, associates, representatives and agents. This communication does not constitute advice relating to investing or otherwise dealing in securities and is not an offer or solicitation for the purchase or sale of any securities. Grip does not guarantee or assure any return on investments and accepts no liability for consequences of any actions taken based on the information provided. For more details, please visit www.gripinvest.in

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