Capital Float Raises $7.2 Mn In Its First International Debt Investment

Amazon Inc-backed online lending fintech startup Capital Float has raised its first international debt investment of $7.2 Mn (INR 48 Cr) from the Netherlands-based Triodos Investment Management, taking total debt raise to $130 Mn (INR 840 Cr) so far.

The startup has previously raised debt investment from NBFCs in India, such as Kotak Mahindra Bank, Axis Bank, Reliance Capital and Northern Arc Capital (formerly IFMR Capital), etc. Capital Float has raised $107 Mn in equity funding since inception.

According to a media statement, the startup plans to utilise the funds for onward lending, with prime focus on expanding its MSME borrower segments, as it continues to add its existing assets under management (AUM) of approximately $4 Bn (Euro 3.3 Bn).

Commenting on the funding, Gaurav Hinduja and Sashank Rishyasringa, co-founders of fintech startup Capital Float said, “Investments like these will help put digital lending in India in the international spotlight. With this fresh injection of funds, we will strengthen our focus on expanding our MSME borrower segments.”

Notably, Triodos Investment Management (Triodos IM) has become the first international investment management company to invest in debt at Capital Float through its investment funds Triodos Fair Share Fund and Triodos Microfinance Fund.

A wholly-owned subsidiary of Triodos Bank, Triodos IM, intends to increase its strategic focus on SME lending in India through this collaboration.

On the development, Aditya Mohan, Triodos IM Senior Investment Officer said, “We look forward to contributing to a digital ecosystem which can make credit accessible and affordable to MSMEs.”

Earlier in the week, Capital Float raised $22 Mn from Amazon Inc.

Launched in 2013, Capital Float has expanded into more verticals across various ecosystems such as ecommerce, manufacturing supply chains, retail, travel and hospitality, and digital remittances.

The fintech platform provides funding to businesses who have urge to grow their customer base, purchase inventory, or manage cash flow, through its online portal. The company boasts to provide funds MSMEs within three-days.

According to Inc42 DataLabs funding report 2017, the Indian fintech startups grew by 31% Year-on-Year (YoY) with almost $200 Mn funding received in H1 of this year, recording a growth of 135% since H1-2016.

Other Indian fintech startups making mark in this space include Faircent, Kissht, Simpl, FTCash, Rubique, EarlySalary, MoneyTap, Innoviti, Instamojo.

Even the Government of India recently launched a digital platform ‘Federation of Indian Export Organisations (FIEO) GlobalLinker’ for MSME exporters to get business opportunities, up-to-date business knowledge, improved efficiencies.

India currently houses more than 500 fintech startups. The sector is forecasted to cross $2.4 Bn by 2020, according to KPMG and NASSCOM report. According to the findings of Inc42 DataLabs, the Indian fintech sector reported 102 funding deals worth $2.59 Bn till November, last year.

The Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy. As per a report by ICRA, the credit to micro, small and medium enterprises (MSMEs) is expected to grow at 12-14%  over the next five years. As on March 2017, credit to MSMEs stood at $240 Bn (INR 16 Tn).