Magicpin raises Rs 15 cr debt from Stride Ventures to deepen AI play

The venture debt route allows Magicpin to raise capital without significant equity dilution

Hyperlocal e-commerce platform Magicpin has raised Rs 15 crore in debt funding from Stride Ventures as it looks to double down on artificial intelligence (AI)-led offerings for small retailers, people aware of the matter told Business Standard. 

 

The venture debt route allows the company to raise capital without significant equity dilution, while continuing to invest in long-term technology capabilities. 

 

The company has already put in about $1 million (roughly Rs 8.5-9.2 crore) to develop its AI-powered assistant, ‘Vera AI’. The tool is designed to assist small retailers across the country to streamline their operations, enhance digital presence, and drive customer engagement. 

 

“The company has already deployed a part of the amount to invest in Vera AI. It is likely to use the remaining amount to do further innovations in Vera while also experimenting with other AI-specific innovations,” a source said. 

 

Since its launch in 2015, Magicpin has raised venture debt three times, including the latest round. It has already repaid its earlier borrowings, and also pre-paid its second debt tranche ahead of schedule, a source added. 

 

While venture debt refers to a loan given to startups that must be repaid with interest, usually without giving up equity, venture capital is equity investment where investors take ownership stakes in exchange for funding and share the company’s risk and upside.

 

Magicpin has raised $100 million in total funding to date. This is inclusive of debt.

 

In a recent conversation with this newspaper, Anshoo Sharma, chief executive officer and co-founder at Magicpin, said that the AI-led merchant enablement will unlock a significant new revenue stream for the company, contributing meaningfully to its SaaS (software-as-a-service) and advertising business over the next 2-3 years. The platform estimates this to be a multi-billion dollar opportunity over the next 5-7 years, as local retailers shift from manual marketing and agencies to automated, performance-led platforms. Magicpin has onboarded nearly 250,000 retailers across categories including fashion, food, and more.

 

The company recently launched Vera after a successful pilot covering 100,000 retailers that witnessed a 1.5-2 times rise in visibility, and up to three-times increase in customer actions, as well as a meaningful jump in conversion to paying customers.