Google Backs Indian Retail Financing Startup Progcap

Corporate retail financing startup Progcap has raised $40 Mn in its follow-on Series C funding round. The round was co-led by Creation Investments and Tiger Global Management. 

Google participated in the investment round as a new investor while Progcap’s existing investor Sequoia Capital India also took part.

Progcap will use the funds to expand business and accelerate product development.

With the current fundraising, Progcap has raised $101 Mn to date. 

Commenting on the fundraising, Pallavi Shrivastava and Himanshu Chandra, cofounders of Progcap, said, “We are delighted that our existing investors have continued to deepen their conviction in the company. Progcap is becoming the core operating engine for all the transactions of its customers, providing them with credit and technology solutions that make their businesses more efficient.” 

The latest development comes after Progcap earlier secured $30 Mn in its Series C funding round from Tiger Global, Creation Investments, Sequoia Capital and GrowX Ventures.

Founded in 2017 by Pallavi Shrivastava and Himanshu Chandra, Progcap helps in digitising supply chains and offers financing solutions to small and medium businesses (SMBs). It claims to have disbursed more than INR 6,500 Cr credit loans to over 700K SMBs.

Progcap aims to become a full-stack retailer-focused digital bank that digitises, automates, and eases capital movement across the supply chain to SMBs. 

According to the startup, Progcap has clocked an annual loan disbursal of $1Bn. It has also grown by 4x year-on-year (YoY).

In June 2021, Progcap bagged $25 Mn in its Series B round from Tiger Global and existing investor, Sequoia Capital India. Prior to that, it raised $5 Mn in a Series A round and $1 Mn in its seed funding round.  

It competes with the likes of fintech lending startups ARTH, FlexiLoans, and Aye Finance. 

India’s fintech industry is estimated to reach $1.3 Tn by 2025, growing at a 31% CAGR by 2025. Of the overall fintech market, lending tech will be accounting for 47% ($616 Bn).

The industry is presently seeing a gloomy period due to the funding winter, high inflation rates, geopolitical tensions and impending recession. As a result, funding activities have considerably declined in the fintech sector. 

According to an Inc42 report, fintech startups raised $1.76 Bn in Q1 2022 as compared to the $3.2 Bn fundraisings that happened in Q4 2021. In Q1 CY22, growth-stage and late-stage startups raised $782 Mn and $835.4 Mn respectively, which is much less than what fintech startups secured in the last quarter of 2021.

Recently, some of the late-stage startups including Slice, Innoviti and Stashfin have raised $50 Mn, $10 Mn and $270 Mn respectively.