Drip Capital Expands Working Capital Solutions for Indian SMBs

Drip Capital, a US-based startup, has secured $113 million in funding to expand its working capital solutions for small and medium businesses (SMBs) in India. The funding, which includes $23 million in equity and $90 million in debt, will be used to provide more working capital loans to Indian SMBs and expand the company's operations in the country.

The funding comes at a time when Indian SMBs are facing increasing challenges in accessing financing. Traditional banks in India are often hesitant to lend to SMBs, especially those in the export and import sectors, citing collateral requirements as a major obstacle.

Addressing the Challenge of Accessing Financing in India

Drip Capital's innovative approach has been a game-changer for many Indian businesses. The company provides working capital loans to SMBs based on their revenue and cash flow, not collateral. This allows businesses to access the financing they need to grow their operations without having to put up valuable assets as security.

Drip Capital currently serves between 9,000 and 10,000 businesses, with around 60% coming from India.

The company's target customer generates annual revenue between $500,000 and $100 million.

Drip Capital is already profitable and aims for 40% year-on-year growth in the next two years.

Investing in Growth and Expanding Services in India

The new funding will allow Drip Capital to expand its operations in India and offer a wider range of services to its clients.

The company plans to use the equity to expand its product offerings and develop new AI-powered solutions for risk analysis.

The debt financing will enable Drip Capital to provide more working capital loans to SMBs.

Drip Capital has already applied for a non-banking financial company (NBFC) license in India to expand its offerings to domestic businesses.

How Drip Capital's Solutions Benefit Indian Businesses

Drip Capital's working capital solutions have been instrumental in helping Indian SMBs overcome the challenges of accessing financing. The company's approach is tailored to the needs of businesses in the export and import sectors, providing a flexible and affordable alternative to traditional bank loans.

Drip Capital advances up to $2.5 million and will essentially buy up their customers’ accounts receivable invoices to the same value (with a servicing commission on top).

This allows businesses to have cash to pay their own suppliers and run their businesses, even when their customers take over two months to pay their invoices.

Drip Capital also provides account payable financing of up to $5 million aimed at helping importers extend the time they have to pay their suppliers.

Leveraging Technology for Efficient Trade Financing in India

Drip Capital uses AI and data analytics to automate and digitize its processes, making it more efficient and cost-effective. This allows the company to offer competitive rates and faster turnaround times to its clients.

The company's AI-powered platform helps to streamline the application process and assess credit risk.

Drip Capital's technology allows it to provide more personalized and tailored solutions to its clients.

The Importance of Trade Financing for the Growth of Indian Business

Trade financing is crucial for the growth of Indian businesses. It helps businesses to manage their cash flow and invest in their growth. By providing working capital solutions, Drip Capital is playing a vital role in supporting the growth of the Indian economy.