Credflow raises $2.1 million in seed funding

Bengaluru: Mumbai-based fintech startup Credflow, which offers cash flow management solutions for Indian small and medium enterprises (SMEs), has raised $2.1 million (or Rs15.2 crore) as part of its seed round of financing led by Stellaris Venture Partners, Omidyar Network India, and Flourish Ventures.

According to the company, it will be investing the funds to further develop its platform, strengthen its tech capabilities and build new products, with a focus on expanding its customer base. Credflow is also looking to expand its team across tech, product and marketing.

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The year-old startup provides a software-as-a-service (SaaS)-based cash-flow management platform to SMEs, helping them get a view on pending amounts by customer, sending timely payment reminders, validating invoices and negotiating discounts for early payment, thus enabling these businesses to reduce their working capital cycles by 25-30%.

“Delayed collections is a major challenge that Indian SMEs face and capital stuck in receivables is a leading cause for financial stress. Indian SMEs, particularly traditional manufacturing and distribution businesses in the business-to-business (B2B) supply chain are still using offline processes to manage their receivables and payables. Much of fintech innovation in the past decade has been focused either on large enterprises while the mid-market B2B segment remains largely unaddressed,” Kunal Aggarwal, founder, Credflow.

Since its launch last May, Credflow has signed up more than 5,000 businesses processing invoices worth Rs70,000 crore.

"While the SME sector has begun digitizing and formalizing rapidly, cash flow management remains a chronic pain point. We believe that CredFlow’s focused solutions will significantly improve the financial health of SMEs and accelerate their growth by empowering SME business owners with cutting-edge digital tools and analytics to manage cash flows efficiently,” said Treasa Mathew, director, Omidyar Network India.

Credflow is now looking to build a full stack solution, including cash flow-based financing, treasury management and payments management to help SMEs optimize their cashflows and accelerate their growth.

“Credflow’s payment dashboard commands the attention of the business owner and becomes the primary daily management information system for the business. In the long run, this will help Credflow become the financial operating system for small and medium-sized businesses, providing a view on their overall financial health and helping them access a diverse set of own and third party financial products,” added Ritesh Banglani, partner, Stellaris Venture Partners.