SAIF Partners has invested US$1 million in the digital SME finance company Capital Float. It secured an initial round of angel funding in early 2014. In June 2014, it announced a seed investment of US$2 million from Aspada Investment Company.
Headquartered in Bangalore, India, Capital Float provides working capital loans to under-served small businesses in India via a technology-led loan origination and credit underwriting platform.
On the investment, Ravi Adusumalli, Managing Partner, SAIF Partners said, “SME lending presents a large and growing opportunity in India. We believe this segment requires a differentiated approach, with a potential to use technology to disrupt existing models. We really like the team at Capital Float and their approach to the business. We look forward to a mutually-fulfilling partnership with Capital Float, as they accelerate their journey to be a leading firm in this segment.”
The company was founded in 2013 by Gaurav Hinduja and Sashank Rishyasringa. It currently works with SMEs across Bangalore, Mumbai, Delhi, and select other cities in India, with a focus on e-commerce merchants, small manufacturers, and early-stage B2B service providers.
Rishyasringa explained, “Even today, many entrepreneurs prefer to borrow from informal sources for their convenience and speed. Our goal – simply put – is to make the process of getting a business loan as simple as shopping online. We are excited to partner with SAIF, and believe that their experience building world-class digital businesses in India will be invaluable in this journey.”
Despite running healthy growing businesses, entrepreneurs in India consistently struggle to raise timely credit from banks. According to an official note, Capital Float offers flexible, short-term loans that can be used to purchase inventory, service new orders or optimise cash cycles. Borrowers can apply online, select desired repayment terms and receive funds in their bank accounts in seven days.