Short of funds? Get your trade financed through Vayana Network

An automobile components maker wanted to build a deep distribution network for its newly launched brand. Competing with established ones made it tough to attract good distributors. Offering higher credit terms would have blocked further working capital. The means of financing were limited.

This is where Vayana Network, a Pune-based business-to-business trade financing platform, stepped in. It tailored a channel financing programme, covering the risk for the lenders and enabling the company to offer an easy financing option, with minimal documentation and no collateral. Over the past three years the distributor enrolment has grown by 300 per cent and the company’s revenue by three times. 

Such short-term trade financing, with a loan tenure of 15-120 days, are based on accepted invoices or purchase orders. This is an established product offered by many banks globally. Borrowers find this attractive — it helps smoothen cash flow issues caused by delayed collections from customers or the need to pay early to suppliers. However due to the need to verify the acceptance of each trade by the buyer, the programme is limited to top-tier companies and often to their biggest suppliers and buyers. 

Founded in 2009, Vayana allows short-term trade financing to be accessible for businesses, big and small. It enables businesses and their trade partners to capture their entire receivable and payable trades electronically, and finance through banks and financial institutions.

“We can set up a receivables program, payable program, vendor financing program, deferred financing program and a credit card program, by working with corporates and counter-parties, getting the documents on electronic mode. It is a transactional financing product — every transaction is a loan, just like in a credit card, where every line statement is a loan,” says founder and chief executive R N Iyer.

Vayana has partnered with five banks and four non-bank finance companies, facilitating Rs 4,000 crore of financing. It has worked with at least 180 companies for their supply chains across 15 sectors. In partnership with financial institutions and MasterCard, it also offers a commercial card solution for payables financing.

The company recently raised a Series-A funding of $4 million from IDG Ventures and Jungle Ventures. The aim is operational break-even in the next 18 months. Depending on the program, the financial institutions or businesses pay a small percentage of the amount financed to the Vayana network. 

Using its network services, the company also helps buyers and suppliers match invoices on a continuous basis, with a service called Vayana Invoice Confirmation and Acceptance Services. The product helps businesses to be more accurate in their Goods and Services Tax (GST) return filing, as well as to monitor and maximise their investment tax credit. 

The company aims at growth of 300 per cent this financial year, compared to 100 per cent last year. It plans to invest in the sales, engineering and product side, and to go abroad this year. It also aims to process a billion dollars of financing in the next 12 months.