Recur Club, a debt platform for startups and SMEs, has announced a Rs 500 crore fund to facilitate growth capital for D2C brands in the current financial year.

Based on the current average ticket size of approximately Rs 3 crore, the fund is expected to support 150-170 D2C brands, depending on their individual financing requirements, Recur Club said in a statement.

Recur Club noted that D2C brands typically require additional capital for the forthcoming festive season to build inventory and expand their presence. The demand for growth capital during the festive season typically rises by around 35%, the firm said.

According to Recur Club, the two key capital challenges faced by D2C brands are inventory financing and capacity expansion. The debt platform claims that through inventory financing, it enables brands to have inventory procured on their behalf, sell it through their existing channels, and repay the financing in installments without adding debt to their balance sheets.

For store and capacity expansion, Recur Club will help acquire equipment and fit-outs for new stores, with brands paying a monthly rental until the financing is repaid, turning capex into opex.

Eklavya Gupta, Co-founder, Recur Club, said , "The festive season can make or break a D2C brand's year, and this year the pressure is higher. Packaging costs have risen by around 21% amid geopolitical tensions in the Gulf region. At the same time, quick commerce is taking a larger share of D2C sales, so brands need to stock more inventory, across more channels, earlier than ever.

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