Credflow Raises $2.1 Mn To Foray Into Cash Flow-Based Financing, Payments

Fintech startup Credflow, which offers cash flow management solutions for Indian small and medium enterprises (SMEs), has raised $2.1 Mn in seed funding led by Stellaris Venture Partners, Omidyar Network India and Flourish Ventures. 

The funds raised would be deployed towards platform development, strengthening tech capabilities and building new products as well as expanding the customer base. The SME cash flow management startup is also looking to expand its teams across tech, product and marketing. 

In terms of the product roadmap, the company said its vision is to build a full-stack solution including cash flow-based financing, treasury and payments management. 

Launched in May 2020, Credflow is a cash flow management SaaS platform that helps SMEs manage their finances by providing a dashboard of pending amounts by customers, sending timely payment reminders, validating invoices and negotiating discounts for early payment, thus enabling these businesses to reduce their working capital cycles by 25-30%. It claims that over 5,000 businesses have used its product to process and sync invoices worth more than INR 70,000 Cr. 

“Delayed collection is a major challenge that Indian SMEs face and capital stuck in receivables is a leading cause for financial stress. Indian SMEs, particularly traditional manufacturing and distribution businesses in the B2B supply chain are still using archaic, offline processes to manage their receivables and payables,” founder Kunal Aggarwal said in a statement. 

Besides Credflow, a host of other Indian startups are creating solutions to help SMEs in India kickstart their digital transformation. According to an Inc42 Plus Analysis, digitisation of the Indian retail sector alone has provided SaaS startups with an opportunity of more than $2 Bn. This led to the emergence of retail tech startups such as Growthpond’s Dukaan, Aarzoo, Kirana King, Shop Kirana, Peel-Works, Khatabook’s MyStore, Dotpe’s DigitalDukaan, OkCredit, Bikayi, MSwipe, Magicpin and many more.

Besides these, companies such as Namaste Credit, Lendingkart and Moneyboxx look to fulfil the working capital needs of small businesses. Given the wide needs of SMBs, there are a plethora of models even within the financing category that Credflow is looking to enter into. For instance, M1xchange operates a digital invoice discounting platform for micro, small and medium enterprises (MSMEs) to offer loans based on orders. It raised $4.5 Mn in funding led by VC firms Beenext Asia and Mayfield in December 2020.