California based fintech startup has managed to raise $ 15 million in a Series A round from venture capital firm Accel Partners, Sequoia India and Wing VC, a Silicon Valley-based venture fund. Existing investors, including US seed accelerator Y-Combinator, among others, also participated.
Drip Capital founded in 2014 by Pushkar Mukewar and Neil Kothari, offers a unique trade financing product targeted towards SMEs in developing markets. With a focus on technology, Drip aims to eliminate the hassle of paperwork and bureaucracy and create a seamless borrowing experience for its clients.
“Drip comes at a crucial time for Indian exporters with a slowdown in bank lending and delays in GST input tax credit refunds. The working capital gap is quite pronounced in India where SMEs contribute to 40% of exports (around $120 billion). However, these SMEs experience 50% rejection rates from banks for trade finance,” said Mukewar, co-chief executive of the venture.
Drip capital is based on trade performance rather than asset value which allows us to effectively service SME exporters. It provides loans ranging from $100,000 to $2.5 million to exporters. In an official statement, the company disclosed that it has funded over $100 million of trade flows across industries in the last 18 months of operations.
“With a partner like Drip Capital, emerging market exporters now never need to say ‘no’ to a new order due to working capital constraints. This offers a huge boost to small and medium businesses, which play a significant role in India’s trade network. Sequoia India is proud to partner with Neil and Pushkar on this journey.” said Mohit Bhatnagar, managing director, Sequoia Capital India Advisors.
The company launched its wholly-owned Indian subsidiary, Drip Capital Services India, in December 2016 and it has offices in Delhi and Bengaluru. With its newly found funding, Drip Capital intends to scale up operations in India and in other geographies.
Pushkar Mukewar, the co-founder of Drip Capital said,“India is a major market for us. We are aiming to expand to other international geographies as well. We are sector agnostic, however, there are some sectors that we would avoid lending to such as gems and jewelry, highly perishable commodities and sensitive sectors like arms and ammunition. ”
Recently, Drip Capital has also raised an undisclosed sum as debt financing from Silicon Valley Bank (SVB) and other entities to build its loan book.
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