India: Online small biz lender Capital Float gets $25m in Series B led by Creation Investments

Property investment graphic. Credit:Flickr/thinpanama

Online lending startup Capital Float has raised $25 million in a series B round led by Creation Investments Capital Management, a US-based venture capital firm that focuses on microfinance Institutions and small enterprise lenders.

Existing investors SAIF Partners, Sequoia Capital and Aspada Ventures also participated.

Capital Float was started in 2013 by Gaurav Hinduja and Sashank Rishyasringa. It provides capital to small business, e-commerce startups, and early-stage business service providers in the form of short-term loans. It has worked with companies such as Snapdeal, eBay, Alibaba, Tolexo, Paytm and Zovi.

The company had raised $13 million in a Series A round last year, led by SAIF Partners, Sequoia Capital and Aspada.

The latest round of funding values the company at $100 million.

“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 blend of tech and data is enabling us to scale rapidly while minimizing defaults and significantly lowering the cost of delivery for micro loans,” said co-founders Hinduja and Rishyasringa in a joint statement.

Capital Float will use the funds for strengthening its credit underwriting engine, penetrating new segments such as travel and driver financing with Uber, as well as introducing new product lines.

It plans to disburse Rs 2,000 crore ($300 million) in loans by March next year. Most of its loan applications come from smaller cities and towns, and the average size is about Rs 50,000.

“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,” said Patrick Fisher, managing partner & founder, Creation Investments.

Creation Investments has made all of its investments in Indian companies so far. They include Sohan Lal Commodity Management, where it invested $15 million in a Series D round with Everstone Capital last year.

In 2013, it participated in a $9.7 million Series C round in Grameen Koota with Incofin Investment Management and MicroVentures India.

In September 2012, Creation Investments was the sole investor in a $6.4 million series D round in Sonata Finance. That came a year after it had put in $5.5 million, along with Promus Equity Partners, in Eko India Financial Services.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.