Mumbai-based lendingtech platform CashFlo has raised $3.3 Mn in Series A funding, founder and CEO Ankur Bhageria told Inc42 on Tuesday. The investment came in from SAIF Partners, and angel investors such as Ashish Iyer (previously Sr. Partner at BCG) and Arpan Sheth (partner and managing director, Bain & Co.) among others.
Bhageria said that the funds will be used for business expansion, platform enhancement and expanding its team to about 80 employees in the next 24 months.
CashFlo: 2.5x M-o-M Growth And More
Founded in 2017 by Dushyant Agarwal and Ankur Bhageria, CashFlo is offering an end-to-end solution for supply chain financing. The company helps sellers undertake invoice discounting through their exchange and get early payments to manage their working capital needs. At the same time, buyers can optimize their working capital by extending payables days.
To implement this, Cashflo ties up with anchor corporates and rolls out a supply chain financing program for their entire base of vendors and dealer/distributors – MSME and non-MSME. It uses a multi-funder model with stock-exchange like dynamic pricing, to ensure coverage of the entire supply chain and enable SMEs to access funds at 1-click on their phones.
Ankur Bhageria, cofounder and CEO, Cashflo said, “Investment from SAIF Partners is a validation of the market opportunity and a testament to the hard work gone in to build this business so far. We are excited to partner with SAIF and be able to leverage their expertise and know-how, especially in financial services, in this next phase of growth.”
The company claims to work with corporates such as Tata Group, Aditya Birla Group, Bajaj Group, etc. It claims to have garnered an order book of over INR 10,000 Cr from its existing contracts. Bhageria told Inc42 that the company has a loan book of INR 2000 Cr from existing clients and is growing 2.5x M-o-M.
Bhageria further told us that the company has around 4000 vendors and makes an average of INR 15 Lakh-INR 20 Lakh invoice transaction. Even though the company is not profitable, it aims to breakeven in the next 36 months. He said that the company will be investing heavily towards expansion for the next 24 months.
Mridul Arora, managing director, SAIF Partners said, “We are delighted to partner with Cashflo which is riding on the massive tailwind of supply chains getting more organised & consolidated; with eventual unbundling of credit.”
Growing Opportunity In Fintech Space
DataLabs by Inc42 has noted that despite consumer preferences shifting towards digital lending, there are some fundamental hurdles in this sector such as lack of financial literacy, the digital divide between urban and rural audiences, and the lack of a robust banking infrastructure throughout the country.
According to Global Fintech Report Q1 2019, more than 1 Mn borrowers and 2 Mn lenders have transacted with lending platforms, with the overall exposure remaining at INR 350 Cr. Further, between 2015 and Q1 2019, the total investment in Indian fintech startups was $7.62 Bn, out of which 25.49% ($1.94 Bn) was for lending tech startups, according to DataLabs by Inc42.
India’s digital lending market has the potential to become a $1 Tn (INR 71 Lakh Cr) opportunity in the next five years, according to a 2018 BCG report.