Related Article: Has Naspers Pulled Out Of What Could Have Been Its Largest Deal In India? While there’s barely an SME that could not shy of timely credit, Capital Float’s thesis was trying to identify certain segments of SMEs which experienced credit score and were data-rich. Says Sashank, “We thought there was a large inhabitants of SMEs in India which were struggling to get loans from banks but actually experienced a significant data footprint because of their engagement with the formal overall economy. Thus, across all segments where it functions – whether it is loaning to retailers, Uber drivers, ecommerce, or B2B business, the duo estimate the market size to be ranging from 7 Mn-10 Mn businesses.
It is for his reason that Capital Float has customized products for many such sections such as Merchant Cash Advance, Online Seller Finance, Pay Later, Invoice Finance among others. Merchant Cash Advance gives loans against cards swipes as businesses are actively using cards payment machines to provide convenience with their customers.
Merchants can receive financing up to 150% of their monthly sales from cards swipes. For instance through Taxi Finance – Capital Float promises to own lowest down-payment on the market, helping cab motorists to own and drive their own taxi on taxi-aggregator platforms like Uber. Similarly through Online Seller Finance, the startup’s partnerships with India’s biggest ecommerce systems helps online retailers access fast and flexible working capital loans to use optimally. Borrowers can opt for fortnightly payments, preventing the burden of paying larger sums at the end of every month. Pay Later, another unique offering, is a collateral-free credit facility that allows the borrower to make multiple drawdowns within a credit limit.
The borrower can make bullet repayments and reset the credit balance, making this a rolling loan service. Interest is charged on the amounts that are drawn down and not on the entire credit limit. Capital Float claims that because the target segment is familiar with technology and has some kind of digital footprint, adoption has been encouraging. Till date, it promises to have disbursed over INR 800 Cr of loans to about 5,000 SMEs and customers in the united states. As as geographical spread can be involved far, it reportedly has borrowers in over a 100 cities, with a significant proportion in Tier II, III cities.
The least loan the platform lends starts at INR 50K while the maximum can go upto INR1 Cr but most loans searched for fall in the bracket lie between INR 7 Lakhs-INR 10 Lakhs. The startup monetises through two primary revenue streams. You are the produce or the interest that it charges on the loans and the second reason is the origination charge on recharge of loans. These rates are in the number of 15%-19%, at par with industry benchmarks.
42 Mn in financing in its Series A, Series B, and Seed rounds from the likes of SAIF Partners, Sequoia Capital, Aspada Investment Company, and Creation Investments Capital Management. Adds Sashank, “When building a fintech startup in India, it is a challenge to mobilise the kind of capital that’s needed is on the supply side to have the ability to level up digital financing.
- The property is utilized in research activities
- The current produce on Indira Vikas Patra computes to
- Valuing real-life companies
- Multiple currency options
Which brings us to the next important question – the default rate of customers on the platform. The duo claims that as far as defaults go, its NPA (non-performing asset) remains under 1%, when compared with the more than 2% to 3% rates seen by SME loan books in India. But with so many competitors playing in the SME lending space such as Lendingkart Tolexo now, AskMeFin, Exclusife, Veritas Finance, among numerous others, how is Capital Float tackling competition? He adds, “If it’s a restaurant owner we’ve a loan against credit card swipes, so we have focussed on product creativity for different sectors. Secondly, we stick out in conditions of the customer experience that people are able to deliver.
We are known for delivering loans in a minute to kirana (local grocery store) stores. The fastest loan that can be disbursed to these stores will take significantly less than eight minutes. And, for the, Sashank is convinced that their team has been a major traveling factor, which includes been the tipping point in their growth story literally. He explains, “Honestly we brought together a senior management team in an exceedingly short time. After our Series A round Just, we made a concerted work to put a stellar cast of industry veterans with a lot of experience together. That team has allowed to scale us much more rapidly than we might did otherwise.