Magicpin raised loan of Rs 15 crore

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 invested around $1 million (approximately Rs 8.5-9.2 crore) to develop its AI-powered assistant, ‘Vera AI’. The tool is designed to help small retailers across the country streamline their operations, enhance digital presence and enhance customer engagement.

“The company has already deployed a portion of the amount for investment in Vera AI. The remaining amount is likely to be used for further innovations in Vera, as well as experimenting with other AI-specific innovations,” a source said.

Since launching in 2015, MagicPin has raised venture debt three times, including the latest round. A source said that he has already repaid his previous borrowings and has also paid the second installment of his loan ahead of schedule.

While venture debt refers to loans given to startups that must be repaid with interest, usually without giving up equity, venture capital is equity investment where investors take an ownership stake in exchange for funding and share the risks and profits of the company.

MagicPin has raised a total of $100 million in funding to date. This also includes debt.

In a recent conversation with this newspaper, Anshu Sharma, CEO and co-founder, MagicPin, said AI-led merchant enablement will open up a significant new revenue stream for the company, which will contribute 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-based platforms. MagicPin covers approximately 250,000 retailers across fashion, food and other categories.

The company recently launched Vera after a successful pilot covering 100,000 retailers, which saw a 1.5-2x increase in visibility, and up to threex increase in customer activities, as well as a meaningful jump in conversions to paying customers.