Indian FinTech Startup Capital Float Raises $25M at $100M Valuation

Even as US lending companies face a lot of heat (and stocks fall like a pack of cards), India’s largest online lending platform and small business lender Capital Float has raised $25 million in Series B financing. This round was led by Creation Investments Management LLC along with existing investors Aspada, Sequoia India, and SAIF Partners valuing the company at $100 million. This is Capital Float’s third round of funding, bringing the total equity capital raised so far to $42 million.

This round of funding will help Capital Float to expand its lending footprint to over 20,000 SME in 100+ cities, and continue to introduce new, transformational financial products online. It will also empower the company to broaden the capital sources on the platform: in addition to lending from its own balance sheet. Capital Float operates a lending marketplace with multiple large banks and NBFCs actively participating.

At Capital Float, we are striving to create an entirely new paradigm for delivering financial products to SMEs, said Co-founders Gaurav Hinduja & Sashank Rishyasringa in a joint statement. Today, a customer can apply from anywhere through the web or smartphone, and have their creditworthiness analyzed within minutes using sophisticated algorithms that draw on financial and alternative data. In many cases, we are able to approve and disburse a loan in less than an hour. This unique blend of tech and data is enabling us to scale rapidly while minimizing defaults and significantly lowering the cost of delivery for micro loans.

Patrick Fisher, Managing Partner & Founder, Creation Investments, said, SME lending represents a very large, underserved, and growing market opportunity in India. By leveraging technology, Capital Float has built a differentiated model that is able to deliver credit to the smallest of businesses in a scalable and efficient manner. We are impressed with their execution and the scale they have achieved in a relatively short period of time. We are excited to partner with Capital Float in the next phase of this journey.

Kartik Srivatsa, Managing Partner of Aspada said, Capital Float has built best-in class loan-cycle automation tools as well as one of India’s most advanced credit underwriting engines over the last 18 months. We believe that this coupled with their deep understanding of the SME ecosystem in a number of sectors will enable them to lend to highly underserved small businesses.

Ravi Adusumalli, Managing Partner, SAIF Partners, said, "We have been working with Capital Float for some time now and firmly believe that they have created a distinctive technology-led platform for lending to SMEs in India. In particular, they have built a very high-quality team with deep experience across FinTech, and are well on their way to being the dominant player in this segment.

Gautam Mago, Managing Director, Sequoia Capital India Advisors, said, Globally, we are seeing technology and data rapidly transforming lending to businesses and consumers. Sequoia India is excited to deepen the partnership with Capital Float in their journey to build a world-class online lending platform that can scale rapidly, enable faster and better decisions, and mobilize diversified sources of capital.

About Capital Float:

Capital Float offers timely, convenient and flexible loans to SMEs across the country via its unique digital platform. In just over two years, the platform has originated Rs. 400 crore in loans to small businesses across 40+ cities, with 20x growth in the last year. The company has pioneered a series of innovative partnerships to deliver credit to entrepreneurial ecosystems that have been traditionally underserved by banks – with leading aggregators such as Snapdeal and Paytm in B2C e-commerce, Alibaba in B2B e-commerce, Uber in transportation, Pine Labs and mSwipe in payments, in travel, and others.