The Capital That Scales with Performance

This story was authored by: Anuj Tandon, Partner – India & UAE, BITKRAFT Ventures and Ariel Shimoni, Head of Growth, BITKRAFT Ventures

Every consumer app that works eventually hits the same wall. The product finds its market, and users acquired through paid marketing pay back on a predictable schedule. This model is no longer the question. The only concern is the speed: how much faster the company could grow if marketing were not capped by the cash on hand.

This is the moment user acquisition financing was built for.

For most of the last decade, founders who hit that wall had two imperfect options. They could raise equity and spend the most expensive money they will ever touch, on advertising that already pays for itself. In turn trading ownership to fund what is closer to a working asset than a bet. Or they could self-fund, growing only as fast as last month's revenue allows, and watch better-capitalized competitors take share they could have held. Neither choice fits a business whose marketing is profitable and measurable.

User acquisition financing closes that gap. In its simplest form, it is capital structured against the exact thing it funds. A company spends to acquire a cohort of users. That cohort generates revenue over the months that follow. Here, the financing advances against that future revenue and is repaid only as it arrives. The capital scales with performance rather than with a fundraising calendar, sitting outside the cap table, and turning a marketing budget from a constraint into a lever. When the unit economics are sound, more fuel simply means more of a good thing.

The asset has matured alongside the data behind it. Cohort-level measurement is now standard practice. Payback curves are observable, attribution has stabilized after years of platform change, and a profitable acquisition engine can be underwritten with the same rigor a lender applies to any predictable receivable. The market has followed. According to a 2025 report by InvestGame, the category has gone from a single early institutional entrant (General Catalyst's Customer Value Fund in 2019) to twelve dedicated providers in under seven years: eight specialist UA financing firms and four private capital funds running separate UA vehicles. The dollars are scaling just as fast. With committed capital projected to scale up to $2.5B by next year in UA financing deployment. What was once a niche workaround is becoming a permanent layer of the consumer app capital stack, sitting between venture equity and traditional debt and doing work that neither does well.

That is the why. The harder question is who is positioned to do it properly, because user acquisition financing is only as good as the judgment behind it. The work is in the underwriting: reading cohort payback curves and return on ad spend by channel, retention and monetization over time, the concentration and durability of spend, and the contribution margin underneath it all. That is the lens of an operator, not a generalist lender. Get it right and the asset is durable and self-liquidating. Get it wrong and capital is mispriced against risk no one understands.

Why It Tends to Sit with Operators

Because the work is operational, the providers who do it well usually come from an operating background rather than a purely financial one. Reading a cohort the way the company does, knowing which channels decay with which compound, and pricing that judgment correctly is closer to running a growth team than to running a credit desk. That is part of why the category has grown up alongside the operator-investors who already understood these businesses, and why it rewards pattern recognition built over many companies rather than a single underwriting template.

User Acquisition Financing in India

India’s consumer app and gaming ecosystem has transitioned from raw user volume to data-backed monetization, with the BITKRAFT Redseer report predicting it to be $7.8Bn 2030 from $2.4B in 2025. Driven by India’s digital infrastructure and a shift toward in-app purchases and subscriptions, local platforms are now deploying performance marketing budgets at a scale that will soon rival their global peers.. 

Yet, as these companies scale, they encounter a sharp contrast in local financing. India's funding ecosystem is exceptionally efficient at the bookends: early-stage venture equity is abundant for taking initial product risks, and late-stage capital is highly organized for mature enterprises. However, a structural gap remains in the middle. This mid-stage void is exactly where new models of growth financing, like user acquisition financing, fit, providing financing that funds growth for startups without diluting equity. The timing works now because Indian cohort data and payback curves have matured to global standards of predictability. 

Which Companies It Suits

User acquisition financing fits companies that have moved past proof and into profitable scale. Revenue is recurring or predictable. Paid acquisition is a core growth engine, run by teams that measure everything and treat marketing as a lever rather than a lifeline. Spend is already meaningful, often seven figures a month, with cohort history deep enough to underwrite. And the company is typically founder-led, looking for fuel rather than rescue. For businesses that fit, capital is not what decides how fast they grow. It is what lets them decide.

At a certain scale, a company's capital structure deserves as much attention as its product. As measurement matures and dedicated capital enters the space, user acquisition also moves from a niche workaround toward a standard layer in how consumer companies fund their growth. The conditions in markets like India suggest that shift is only beginning.