Drip Capital, a startup that helps small and medium-sized exporters secure working capital, has raised $25 million to expand its reach globally.
The Series B financing round for the two-and-a-half-year-old startup was led by Accel and Boosts Total Venture. In an interview with TechCrunch, Neil Kothari, co-founder and co-CEO of the startup, said Drip Capital has also raised $55 million in debt funding over the last two years, making the startup’s total raise $100 million.
Exporters worldwide have to wait for about 60 days (if not more) before they get paid. This creates an immense challenge for millions of small and medium-sized exporters who don’t have any savings to process additional orders until they get paid from their previous clients.
“Despite the fact that they’re reputable, credit-worthy businesses, over half of them still get turned down by banks for the capital they need. We invested in Drip to change this,” said Arun Mathew, a partner at Accel.
After signing up to the platform, an exporter can submit their invoices and open a credit line to finance their next orders.
Drip Capital works with investors and lenders in developed markets to help exporters secure financing. The startup, which has over 800 exporters and importers on its platform, said it has already issued loans worth more than $500 million to date.
Unlike many other online lenders that take no risk liabilities of the flowing capital, Kothari said Drip invests much of its own money in lending, too. “We have skin in the game. This adds tremendous credibility.”
The startup, whose platform is being used to do trading in 60 countries, will use the capital to expand its global footprint. It plans to launch in the UAE, Mexico, and the United States in the coming months.
“With new funding in place, we can replicate the model we’ve created in India with other geographies by scaling the product, engineering, sales and marketing teams,” the startup said.
Drip Capital also intends to expand its offerings to importers, adding a new option that will allow businesses to make more purchases from international markets and increase their sales.
Many established companies such as Honeywell, Sam’s Club, TJ Maxx, Whole Foods, and Zara have purchased goods from exporters that have received financing through Drip, the startup said.
Drip Capital, of course, isn’t the only platform that helps exporters get paid faster. But larger companies tend to do it all and optimize the supply chain for the biggest companies in the world. Drip Capital is focusing on a niche market.