SUMMARY
This is Clear’s second acquisition after taking over another B2B payments platform Ybang in July 2021
Clear has secured $140 Mn in equity capital after its Series C funding last year
Xpedize will be rebranded as ‘Clear Invoice Discounting’ and will provide working capital and liquidity to suppliers
Bengaluru-based fintech SaaS and tax filing startup Clear has acquired Gurugram-based supply chain financing tech startup Xpedize for an undisclosed amount.
This acquisition marks (ClearTax) Clear’s foray into credit for Small and Medium Enterprises (SMEs) and business-to-business (B2B) payments.
Xpedize will be rebranded as ‘Clear Invoice Discounting’ and will provide working capital and liquidity to suppliers. It is expected to process 1,000 Cr GMV annualised by the end of financial year 2022, according to a statement.
Founded in 2011 by Archit Gupta, Srivatsan Chari, Ankit Solanki, Raja Ram Gupta, Clear would now cater to suppliers that it has on its platform across various sectors including pharma, FMCG, auto, among others.
By providing working capital solutions to the vendors of their enterprise customers, Clear is targeting to achieve $3 Bn throughput by financial year 2024, it said.
Xpedize was founded in 2017 by former Citibank executives Regan Mithani and Deepak Gugnani and its investors included HDFC Capital and YourNest Venture Capital. The startup’s more than 25 member team will continue to run the invoice discounting platform, Clear said in a statement.
“This acquisition is important for us as we strive to make supply chain financing programs with large enterprises successful. A large chunk of businesses in India uses our GST compliance suite, and these customers will reap benefits of the network effect. Higher supplier participation, zero overheads for enterprises, and better discount rate discovery are our three focus areas to disrupt this space,” said Archit Gupta, founder and CEO, Clear.
Gupta further said, this acquisition speeds up the startup’s journey towards enabling payments and efficient financing for Indian businesses. Xpedize platform is already running with multiple large enterprises and allows them to pay their suppliers faster, he added.
Clear’s platform has integrated with some banks and Trade Receivables Discounting System (TReDS) platforms. It is an initiative of Reserve Bank of India (RBI) to facilitate MSME receivable payments from corporates. The primary objective of the TReDS platform is to address the critical needs of MSMEs – encash receivables and eliminate credit risk.
Over the next few quarters, Clear Invoice Discounting will integrate with more banks and NBFCs to ensure a robust supply of credit to a wider supplier base. Clear has partnered with banks and other financial institutions, including Receivables Exchange of India (RXIL) and Citi.
It raised $75 Mn in October last year in Series C funding led by Kora Capital, Stripe, Alua Capital, Think Investments, and existing investors to accelerate Clear’s expansion into B2B credit, payments, and into international markets.
Other Fintech Startups In MSME Segment
With this new acquisition, Clear will compete with the likes of Lendingkart, KredX, Rupeek, among others that offer credit to SMEs. The MSME lending space is likely to witness substantial growth with the central government’s announcement to increase the budgetary allocation for MSMEs from last year’s INR 15,699.65 Cr to INR 21,422 Cr now (up by 26.71%).
Meanwhile, other players in the segment such as Lendingkart are working to make credit available for the SMEs. Fintech startup Lendingkart partnered with the Bank of Maharashtra to co-lend business loans to MSME borrowers across India at low interest rates.
Through this partnership, the startup aims to make credit available to MSME borrowers at their doorsteps powered by the ‘zero touch’ technology platform Lendingkart ‘2gthr’. The MSMEs will be eligible for loans up to INR 10 Lakhs.
Last month, asset-backed digital lending startup Rupeek launched India’s first-ever gold-powered card to allow millions of consumers to get credit requirements using their idle gold. Rupeek raised $34 Mn in January this year in a round led by Lightbox, GGV Capital and Bertelsmann, taking its valuation to $634 Mn.
