Wednesday, August 23, 2017

Capital Float Secures $45 Million of Equity Funding in Series C Round Led by Ribbit Capital


Capital Float, India’s largest digital lending platform, announced today that it has raised $45 Million (Rs. 293 crores) in Series C equity funding. The round was led by Silicon Valley-based Ribbit Capital, with participation from existing investors - SAIF Partners, Sequoia India and Creation Investments. In parallel, the company has also raised more than $67 Million (Rs. 437 crores) in new debt lines from leading banks (including RBL Bank, IDFC Bank, Kotak Mahindra Bank) and NBFCs (including IFMR, Reliance Capital), bringing the total amount of fresh capital raised in the last 12 months to over $112 Million (Rs. 730 crores).

“We are thrilled to partner with a world-class FinTech investor like Ribbit Capital at this key inflection point in Capital Float’s journey,” said Co-founders Sashank Rishyasringa & Gaurav Hinduja in a joint statement. “We are growing at an exciting pace, currently originating over Rs. 200 crores in disbursals every month. Over the past year alone, we have disbursed loans of over Rs. 2,100 crores to 12,000 plus customers across 300 cities. Our proprietary technology and credit-scoring platform is now able to deliver loans in as fast as 3 minutes via a mobile app. Despite achieving such rapid growth, we have kept our NPAs to 2%, and are on track to reach profitability by the end of current fiscal year.”

Capital Float will utilize these funds to increase its geographic footprint, improve customer experience and launch a new set of innovative credit products for SMEs across India. It will also invest in scaling up its hybrid marketplace model and deepening technology integrations with partner financial institutions.

Over the past year, the lender has rapidly diversified its portfolio, lending to a wide range of sectors including manufacturing, services, e-commerce, transportation, hospitality and retail. Post-demonetization, the company expanded its lending business to target small merchants and kirana stores, delivering loans as small as Rs. 25,000. These touch-free loans are delivered in seconds via its mobile app, powered by the India Stack.

Capital Float has also pioneered a hybrid marketplace model, where banks and NBFCs “co-lend” alongside the company’s own balance sheet to fund borrowers. The company has currently partnered with 5 institutions, including IDFC Bank and IFMR, and the marketplace contributes to 35% of the company’s total disbursals.

Nick Shalek (Partner) from Ribbit Capital, which led the Series C, said “We’ve been impressed by the Capital Float team since the first time we talked with them about their business four years ago. The company has achieved remarkable growth by delivering innovative products to small businesses and consumers, while at the same time providing attractive returns to investors on the platform. With this financing, Capital Float is further cementing its lead as the top technology-enabled NBFC in India, and we are thrilled to support the company's journey.”

Ravi Adusumalli (Managing Director), SAIF Partners, added “We have been a part of Capital Float’s journey from their seed round of funding. Their experienced senior management team has strategically led the company’s growth via innovative products and partnerships with ecosystem leaders. Capital Float continues to disrupt lending at a granular level in India.”

“Sequoia is delighted to re-invest in Capital Float. Their strong customer focus and continuous drive to diversify the product portfolio to discover and meet niche areas of industry demand gives us great confidence in the company’s future prospects” added Gautam Mago (Managing Director), Sequoia Capital India Advisors.

Patrick Fisher (Managing Partner & Founder), Creation Investments, another returning investor, pointed out to the positive atmosphere created by government policies. "With the government's drive towards a digital India, we believe the FinTech sector will be a key enabler towards achieving this vision. Capital Float has proven itself as a leader in the digital lending space and hence they have our wholehearted support. We hope with this fresh infusion of funds, the company will reach even greater heights”, he said.

·         Series C equity funding round of $45 million (Rs. 293 crores) led by Ribbit Capital with significant participation from existing investors – SAIF Partners, Sequoia India and Creation Investments.
·         Additional $67million (approx. Rs. 437 crore) raised in debt from banks (including RBL Bank, IDFC Bank, Kotak Mahindra Bank) and NBFCs (including IFMR, Reliance Capital). Takes total funding in last 12 months to $112 million.
·         Capital Float has originated Rs. 2,500 crores in loans till date to 15,000 plus customers. Currently originating Rs. 200 crores of loans per month.
·         New loan product focusing on small merchants and kirana stores. Micro loans, disbursed in less than 3 minutes via mobile. Currently disbursing 1,000 loans per month, plans to reach 5,000/month by end of fiscal year.
·         Portfolio outstanding grew nearly 4x over the last year, and currently stands at Rs. 700 crores. 
·         Operates country’s largest hybrid marketplace with leading banks & NBFCs (e.g. IDFC Bank & IFMR) participating as co-lenders, 35% of loans are serviced via the marketplace
·         NPAs at 2.0%. Company on track to achieve profitability in current fiscal year.

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