Palo Alto and Mumbai based fintech firm Drip Capital has raised $25 million in Series B funding led by Accel
Mumbai: Palo Alto and Mumbai based fintech firm Drip Capital has raised $25 million in Series B funding led by Accel with participation from existing investors Sequoia India, Wing VC, and Y Combinator. New investors in this round include GC1 Ventures and institutional investor platform Trusted Insight. The company has raised over $45 million of equity to date and $55 million of debt, taking the total funding raised to $100 million (Rs 700 crore).
Drip Capital uses technology to accelerate global trade and empower small companies and entrepreneurs in emerging markets.
At the click of a button, Drip’s solution provides small business exporters the working capital they need to grow their business. The trade finance gap currently stands at $1.5 trillion globally - the majority of which is amongst small business exporters in emerging markets. In other words, that is, $1.5 trillion of trade that does not happen due to a lack of access to working capital. This is the problem Drip set out to solve, financing its first invoice in India in 2016.
“Trade finance is an age-old paper-based industry dominated by banks that primarily focus on large, established corporate customers. Hence, small businesses, despite accounting for 50% of merchandise exports from India, remain largely neglected. Our mission is to level the playing field for these small business exporters, not just in India but across emerging markets around the world,” said Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital.
Drip is rebuilding the core parts of international trade finance infrastructure from the ground up. The company uses electronic data and technology to rapidly underwrite and finance cross-border B2B transactions.
“With an automated system, Drip provides a seamless customer experience and can finance a shipment with the click of a button. On the backend, Drip integrates with multiple electronic data sources and has built proprietary algorithms to underwrite the risk of every shipment”, adds Neil Kothari, Co-Founder and Co-CEO, Drip Capital.
A Mumbai-based exporter of steel products, and a Drip Capital customer since 2017, Siddharth Gupta, Director, Isinox Limited, said, “Due to the limited bank facilities available to us as a mid-sized exporter, our business started stagnating. With its collateral-free finance solution and an online approach to trade finance, Drip gave us the flexibility to service more orders which helped increase our revenue considerably.”
Since its launch in India, Drip’s business model has showcased tremendous potential with a 10x growth rate in the last two years. The company has already funded more than $500 million of trade across 400+ exporters.
“By FY 2020, Drip aims to fund $1 billion of trade originating from India. With the new round of funding and a proven model, the company is planning to expand its global footprint, launching in the United Arab Emirates (UAE) and Mexico in 2019,” Mukewar added.
Elaborating on the funds raised, Abhinav Chaturvedi from Accel says, “We have been associated with Drip since its inception and have participated in all their funding rounds till date. It has been inspiring to see the company’s progress in the last two years. We are excited to support them in their next phase of growth as they take their business model global.”