Capital Float raises $22 million equity funding from Amazon

Bengaluru: Digital lending firm Capital Float (Zen Lefin Pvt Ltd) on Tuesday said it has raised $22 million (Rs144 crore) in equity funding from Amazon Inc., taking the total equity funding in the company to $107 million.

The current funding from Amazon is part of Capital Float’s Series C round in August 2017 when it raised $45 million from Palo Alto-based Ribbit Capital and existing investors SAIF Partners, Sequoia India and Creation Investments, co-founders Gaurav Hinduja and Sashank Rishyasringa said in a phone interview.

Capital Float had also raised debt financing of $130 million from a number of banks including Kotak Mahindra Bank, IDFC Bank, RBL Bank, HDFC Bank and non-banking financial companies (NBFCs) including Reliance Capital, L&T Finance, and Northern Arc Capital.

Founded in 2013, Capital Float is an NBFC registered with the Reserve Bank of India (RBI). It offers specialized credit and financial loans to businesses and utilizes its own proprietary loan underwriting system to lend to potential borrowers.

The company will use the current funding to expand into new lending categories, develop new technological capabilities and to grow its loan book, Hinduja told Mint.

Capital Float’s customers include small and big merchants selling on e-commerce platforms like Amazon and Flipkart, retailers and wholesalers, restaurants, and kirana stores among others. It currently claims to have 50,000 customers across 300 cities in India and its average loans ticket size is around ₹ 10 to 12 lakh.

According to a joint statement from Hinduja and Rishyasringa, in the past six months alone, the company has added several new products such as specialized loans for schools, doctors, and pharmacies.

“(We have) crossed INR 1,100 crores ($170 million) in overall loan portfolio outstanding. We’ve also achieved tremendous growth on the customer acquisition front, adding 50,000 new customers across the country. With this investment from Amazon, we enter FY19 with relentless focus to add 300,000 customers and originate over INR 5,000 crores ($800 million) in loans this year,” Hinduja and Rishyasringa said.

According to Amit Agarwal, senior vice president, Amazon India, credit lending in India is highly under-penetrated. “Capital Float is bringing the right kind of credit solutions to the underserved and informally served segments of SMEs to help realize their full potential. The company is well positioned for the digital age with its strong technology and data-driven approach to lending,” he added.

Capital Float competes with other online small and medium enterprise (SME) focused platforms such as Lendingkart, which raised ₹ 565 crore in a Series C round in February; Gurugram-based Aye Finance, Mumbai-based Neogrowth and Intellegrow also lend to SMEs.