A recent B2B unicorn was the first to use the Benefits.club platform, which allowed employees, their social network, HNIs, and institutional investors to invest in the debt of the company.
Bengaluru, Karnataka, India – Business Wire India
Benefits.club, in affiliation with its NBFC partner - Kalandri Capital, has recently launched an innovative platform that allows employees, their social network, HNIs, and institutional investors to invest in the debt of their employer. Through the Benefits.club platform, companies can raise debt at a lower cost compared to traditional avenues such as banks and NBFCs while offering an attractive investment opportunity to the employees.
In their pilot program, Benefits.club has raised more than 30 crores for one of India’s newest B2B unicorns. "Benefits.club has allowed us to access a completely new source of funds at a much lower cost. This innovation has the potential to create significant cost savings for companies. It has also given employees, who have been a big part of our growth journey, access to a safe and high yielding instrument which was earlier unavailable," said the CFO of the B2B unicorn. Benefits.club will deploy the raised capital to fund the B2B unicorn's short-term borrowings using a covered debenture structure.
"Employees are often better placed than even bankers to evaluate the future of their company because they live and breathe the business, spend 50 hours a week there - gathering a tremendous understanding of how well their company is doing. It also helps build their affinity for the employer and can act as a tool to align incentives. Moreover, the fact that the employees themselves are invested in the instrument is a massive vote of confidence for external investors", said Akshay Shah, founder of Benefits.club.
The investors, through the invite-only Benefits.club app, can view details of their investments, track their investments, make redemption requests at any time for a small processing fee, view the percentage of investment made by employees, and purchase future instruments. Benefits.club's NBFC partner Kalandri Capital is also looking to insure the payables for future offerings.