Capital Float, Indian online lending platform, has raised $25 million (Rs. 170 crore) in Series B financing. The round was led by Creation Investments Capital Management, LLC, with significant participation from existing investors SAIF Partners, Sequoia India, and Aspada. This is the company’s third round of funding, bringing the total equity capital raised thus far to $42 million.
Capital Float offers timely, convenient and flexible loans to SMEs across the country via its unique digital platform. In just over two years, the platform has originated Rs. 400 crore in loans to small businesses across 40+ cities, with 20x growth in the last year. The company has pioneered a series of innovative partnerships to deliver credit to entrepreneurial ecosystems that have been traditionally underserved by banks – with leading aggregators such as Snapdeal and PayTM in B2C eCommerce, Alibaba in B2B eCommerce, Uber in transportation, Pine Labs and mSwipe in payments, Via.com in travel, and others.
This round of growth capital will help Capital Float expand its lending footprint to over 20,000 SMEs in 100+ cities, and continue to introduce new, transformational financial products online. It will also enable the company to widen capital sources on the platform: in addition to lending from its own balance sheet, Capital Float operates a lending marketplace with multiple large banks and NBFCs actively participating.
“At Capital Float, we are striving to create an entirely new paradigm for delivering financial products to SMEs,” said co-founders Gaurav Hinduja & Sashank Rishyasringa in a joint statement. “Today, a customer can apply from anywhere through the web or smartphone, and have their creditworthiness analyzed within minutes using sophisticated algorithms that draw on financial and alternative data. In many cases, we are able to approve and disburse a loan in less than an hour. This unique blend of tech and data is enabling us to scale rapidly while minimizing defaults and significantly lowering the cost of delivery for micro loans.”
Patrick Fisher, Managing Partner & Founder, Creation Investments, said, “SME lending represents a very large, underserved, and growing market opportunity in India. By leveraging technology, Capital Float has built a differentiated model that is able to deliver credit to the smallest of businesses in a scalable and efficient manner. We are impressed with their execution and the scale they have achieved in a relatively short period of time. We are excited to partner with Capital Float in the next phase of this journey.”
Ravi Adusumalli, Managing Partner, SAIF Partners, said, "We have been working with Capital Float for some time now and firmly believe that they have created a distinctive technology-led platform for lending to SMEs in India. In particular, they have built a very high quality team with deep experience across fin-tech, and are well on their way to being the dominant player in this segment.”
Gautam Mago, Managing Director, Sequoia Capital India Advisors, said, “Globally, we are seeing technology and data rapidly transforming lending to businesses and consumers. Sequoia India is excited to deepen the partnership with Capital Float in their journey to build a world-class online lending platform that can scale rapidly, enable faster and better decisions, and mobilize diversified sources of capital.”
Kartik Srivatsa, Managing Partner of Aspada said, “Capital Float has built best-in class loan-cycle automation tools as well as one of India’s most advanced credit underwriting engines over the last 18 months. We believe that this coupled with their deep understanding of the SME ecosystem in a number of sectors will enable them to lend to highly underserved small businesses.”
