Capital Float, a Bengaluru headquartered digital lending startup, has raised $22 million (~ ₹144 crore) in equity funding from Amazon Inc. This round will be part of the Series C round in August 2017 when it raised $45 million (~ ₹293 crore) from US-based Ribbit Capital and existing investors SAIF Partners, Sequoia India and Creation Investments. The total funding raised by Capital Float to date is now close to $110 million.
Founded in 2013 by Stanford University alumni Sashank Rishyasringa and Gaurav Hinduja, Capital Float is an NBFC registered with the Reserve Bank of India (RBI). It offers short term working capital to SMEs along as well as specialized credit and financial loans to businesses and utilizes its own proprietary loan underwriting system to lend to potential borrowers.
The freshly raised funds via Amazon will be used by the startup to do product innovations, expand into new lending categories and build proprietary underwriting algorithms.
Earlier in 2017, the startup had raised debt capital from several investors. It raised Rs 15 crore from Mahindra & Mahindra Financial Services by allotting non-convertible debentures (NCDs) and Rs 17 crore from IFMR Capital Finance through NCDs in December 2016. Not only this, Capital Float has recently partnered with Amazon India to enable e-commerce sellers to manage their dynamic working capital requirements.
Amazon has been a big customer for Capital Float, which sees 20% of their customer base come from e-commerce sellers and vendors. This latest investment seems to be in line with its strategy to get a stronger hold on India’s fintech space.
Gaurav Hinduja said that the equity round is independent of its business relationship. “We have been working with Amazon by financing sellers on their marketplace. In the past six months alone, we’ve added several new products and crossed Rs1,200 crore in overall loan portfolio outstanding,” he said.
The above news was first reported in Live Mint.
Speaking about Amazon, the e-commerce giant has been active in investing in Indian startups in the financial space to get a wider customer base. Earlier this year, IndianWeb2 reported that Amazon was in talks to invest in Mumbai-based online insurance startup Acko.
Recent Funding in FinTech Space
Earlier this month, New Delhi-based Namaste Credit, an another fintech category startup has raised USD 3.8 million in series A round of funding from Nexus Venture Partners. Prior to that, Bangalore-based fintech startup SmartCoin had raised $2 million in pre-Series A funding from a top Shanghai headquartered VC fund and Accion Venture Lab. Prior to this, Cash Suvidha, a Delhi-based fintech startup, raised $1 million pre-Series A funding from Initia Holdings Ltd.
In February, a Mumbai based fintech startup Fincash.com raised $150,000 in funding from angel investors including like Mohammed Khan (Founder of Rediffusion), Sameer Narayan (ex- Fund Manager BNP Paribas), among others. Prior to that, a Bengaluru-based fintech startup NiYO Solutions raised $13.2 million in its Series A funding from investors including Social Capital, JS Capital LLC (the family office of Jonathan Soros), and Horizons Ventures and existing investor Prime Venture Partners.
Last November, an Artificial intelligence-powered fintech startup Active.Ai raised $8.25 million in Series A funding led by Vertex Ventures, Creditease Holdings and Dream Incubator.
Fintech space continue to be the most invested segment among startups in India. According to a NASSCOM report published in November 2017 Fintech, along with healthcare, are most funded segments of startups in India, in past one year. The total number of startups in the fintech space has gone up to 360 from 275 in 2016, thus registering 31% growth in the number of startups.