Online photo sharing and printing startup Zoomin has raised Rs.8 crore in debt funding from SVB India Finance, a part of the Silicon valley Bank. The term loan was raised in the last quarter of 2012, Sunny Balijepalli, the founder of Zoomin told NextBigWhat.
Zoomin, launched in 2008 had raised $12 million in two rounds earlier from First Round Capital and Sherpalo Ventures, reports The Economic Times.
Startups which do not want to dilute their equity, usually take the debt route for growth capital. This loan is structured as term loan with equal monthly amortisation and warrants on equity, with which the bank will have the option of buying into the stock at certain price for a period of time.
Zoomin allows customers to store, share, and print their digital photos.
In August, Canvera, an online market place for photographers and photography related things raised $6.5 million from Info Edge India Private Limited, the company which runs popular job search engine Naukri.com. Canvera, launched in 2008 had raised an angel round from DFJ, Footprint ventures and Mumbai angels.
Debt Financing
Debt financing is a popular method employed by companies to raise money. However, conservative companies tend to not leverage debt at all. As this article explains, balancing debt and equity financing means figuring out the costs and benefits of each, and minimizing the cost of capital.
Writes Bloomberg Businessweek:
Choosing debt forces you to manage for cash flow, while, in a perfect world, taking on equity means you’re placing a priority on growth. But in today’s credit markets, raising equity may simply mean you can’t borrow any more.
We recently saw another startup adopt the non-VC route to raising funds. Kerala based MobMe wants to raise funds from investors through an Initial Public Offering at the newly opened SME Exchange which allows companies to raise smaller amounts of capital from the public markets.
Recommended read: How much equity should an Indian startup give to advisors?
