Currently, nearly 99% of all firms are small and medium enterprises (SMEs) in India, contributing to 48% of the country’s exports. Moreover, SME lending and financing are also picking up pace during the pandemic. For instance, between January and August 2021, lending tech startups secured $860 Mn in funding.
In an attempt to help Indians SMBs grow further, fintech startup MODIFI has raised $24 Mn in a Series B round, which brings its valuation to more than $120 Mn. MODIFI, which empowers SMEs to trade internationally with digital trade financing, tripled its business in India in August 2021, and is on track to distribute $1 Bn to the Indian SMEs by 2023.
MODIFI’s Indian business has represented 36% of the company’s financed volume so far in 2021, maintaining the country’s lead as the largest single market for MODIFI. It said the funds will be used to grow MODIFI’s digital trade finance platform for SMEs into a global trade management hub.
The round was led by new investor Heliad Equity Partners with a co-investment from Neva SGR, the venture capital investment vehicle of Italy’s banking group Intesa San Paolo. The round also saw participation from existing investors such as Global Founders Capital, Maersk Growth and Picus Capital.
Founded by Nelson Holzner, Jan Wehrs and Sven Brauer in 2018, the platform provides SMEs with simple digital solutions to finance their trades, protect them from counterparty risk, and easily track and manage their shipments. The new funding round will power major upgrades to the platform, allowing MODIFI customers to take care of all trade-related activities in one place.
“We have successfully contributed to digitising the trade finance industry here, with great help from the ‘Digital India’ initiative. However, finance is just one piece of the global trade puzzle, and Indian SMEs still lack the tools and know-how to trade with the ease and comfort enjoyed by their larger counterparts. Through this funding, we intend to invest in a comprehensive trade management hub that will empower them to take control of their global trade activities,” said Holzner.
As the Indian startup funding hit an all-time high with $26 Bn raised in the first eight months of 2021, the fintech startup ecosystem saw 5.8x higher capital inflow to reach $4.6 Bn funding across 160 deals as compared to the same timeframe last year.