BNPL Startup Capital Float Raises $50 Mn To Expand Partner Ecosystem

Bengaluru-based Buy-Now-Pay-Later (BNPL) startup Capital Float has raised $50 Mn in equity funding led by Lightrock India, Sequoia Capital India, Ribbit Capital, Creation Investments and Dinesh Hinduja Family Office. The round also saw participation from Nubank’s David Velez, CRED’s Kunal Shah and Pine Lab’s Amrish Rau.

The startup said it will use the funds to strengthen and scale the platform and expand its partner ecosystem. Capital Float claims to have witnessed rapid growth over the past year — 2.5 Mn customers using its product to finance over INR 2,000 Cr of online purchases annually.

Launched in 2013 by Gaurav Hinduja and Sashank Rishyasringa, Capital Float is an NBFC that lends to SMEs to help them scale up. It works with ecommerce merchants, small-scale manufacturers and early-stage B2B service providers to provide flexible, short-term loans to their customers.

Its current merchant partnership includes Amazon (powering Amazon PayLater), MakeMyTrip, Unacademy, and BoAt that helps consumers finance purchases across e-commerce, D2C brands, travel, edtech and healthcare. It also recently launched a strategic partnership with Razorpay to expand BNPL to over 100K merchants across the country.

“We are now financing 2 Mn purchases every month across 14K pin codes while maintaining non-performing assets (NPAs) below 1.5%,” the company said in a statement.

The startup additionally operated Walnut, a personal finance app that claims to have 12 Mn+ downloads. The Walnut app offers a range of personal finance features such as expense tracking, budgeting, bill reminders, instant small-ticket loans to salaried and self-employed individuals and insurance options.

The startup last raised INR 50 Cr in debt for a period of 3 years from Triodos Microfinance Fund and Triodos Fair Share Fund in June 2021, taking the total debt fund raised to INR 200 Cr. In April 2020, Inc42 exclusively reported that Capital Float raised $15 Mn in equity from its existing investors.

India is home to approximately 1,263 digital lending startups, out of which over 147 (12% of the total 1,263) are backed by venture capital funding, according to Inc42 Plus analysis and BNPL remains the most favoured sub-segment within the lending tech segment. Yet, it has been the most affected as well during the pandemic.

According to a report by Redseer, loan disbursals for all the key players had taken a hit by almost 90% on value post between March-April 2020 in the immediate aftermath of the lockdown.