Indian lending platform Capital Float raises $22M Series C extension from Amazon

NelsonG · April 23, 2018

Capital Float, the fintech startup that says it is India’s largest online lender, announced today that it has raised $22 million in new funding from Amazon. At the end of last year, reports surfaced that Amazon was considering an investment in Capital Float as an extension of its $45 million Series C, which was announced last August. The Bangalore-based startup confirmed to TechCrunch that Amazon’s investment is indeed an extension of that round and brings the total equity it has raised over the past 12 months to $67 million.

Over the same period, Capital Float also raised $80 million of debt from banks and other financial companies, which it combines with its own balance sheet to finance loans to small businesses and other borrowers. Amazon India is among several e-commerce platforms that the company has partnered with to provide loans to sellers, including Snapdeal and Shopclues.

Since its inception in 2013 by co-founders Sashank Rishyasringa and Gaurav Hinduja, Capital Float has raised a total of about $110 million in equity funding from investors, including Ribbit Capital, SAIF Partners, Sequoia India, Creation Investments and Aspada, as well as total debt lines of $130 million.

During the last six months, Capital Float added 50,000 new customers, bringing its total customer base to more than 80,000 people in more than 300 cities. The startup says it currently disburses more than 10,000 loans each month and now has an outstanding loan portfolio of more than $170 million, with a default rate of about 2 percent. About 70 percent of its loans are microloans ranging from 25,000 rupees to 500,000 rupees (about $376 to $7,530).

With the investment from Amazon, the startup has set an ambitious goal of adding 300,000 new customers and originating more than $800 million in loans this year.

In a press statement, Amazon India’s country manager Amit Agarwal said, “We’re excited to work with Capital Float and invest alongside other investors. We are highly impressed with what Gaurav and Sashank have built and we back missionary entrepreneurs and management teams. Credit in India is highly under-penetrated and 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.”

Over the last year, Capital Float expanded into more verticals, including products for small- to mid-sized manufacturers, point-of-sale financing for retailers and loans for school construction and self-employed professionals like doctors. It also added new online payment gateways to make it easier for borrowers to repay loans and began piloting deep learning-based underwriting models that use data points like image processing, geotags and new policies such as the Goods and Service Tax (GST), an indirect tax launched last year that is levied at every step of the production chain and the banknote demonetization started by Prime Minister Narendra Modi’s government in 2016.