SAIF Partners has announced that it will be investing US$ 1 million in the digital SME finance company Capital Float, headquartered in Bangalore. The current investment by SAIF Partners adds on to their prestigious glamorous portfolio of over 30 companies including Makemytrip, JustDial, HomeShop18, One97, Speciality Restaurants, Havells, Karur Vysya Bank, Mindtree and IPCA Laboratories.
Founded in 2013 by Gaurav Hinduja and Sashank Rishyasringa, Capital Float provides working capital loans to under-served small businesses in India via technology-led loan origination and credit underwriting platform. Both founders returned to India to start Capital Float after completing their MBAs at Stanford University. The company currently works with SMEs across Bangalore, Mumbai, Delhi, and select other cities in India, with a focus on e-commerce merchants, small manufacturers, and early-stage B2B service providers.
Gaurav Hinduja commented,
SMEs have been chronically underserved by the traditional banking system in India, particularly when it comes to working capital. By taking a technology-driven approach, we are able to offer such businesses a unique set of cash-flow based lending products in a timely and efficient manner.
SAIF Partners is a leading venture capital and private equity firm and manages over US$ 1 billion of investments in India. SAIF Partners was founded in 2001 and invests in growth as well as seed stage companies across sectors such as internet, technology, ITeS/KPO, consumer products and services, financial services and healthcare. Ravi Adusumalli, Managing Partner, SAIF Partners, said, “SME lending presents a large and growing opportunity in India. We believe this segment requires a differentiated approach, with a potential to use technology to disrupt existing models. We really like the team at Capital Float and their approach to the business. We look forward to a mutually-fulfilling partnership with Capital Float, as they accelerate their journey to be a leading firm in this segment.”
Sashank Rishyasringa, co-founder of Capital Float further explained, “Even today, many entrepreneurs prefer to borrow from informal sources for their convenience and speed. Our goal – simply put – is to make the process of getting a business loan as simple as shopping online. We are excited to partner with SAIF, and believe that their experience building world-class digital businesses in India will be invaluable in this journey.”
Capital Float is a Non-Banking Financial Company (NBFC) and had earlier secured an initial round of angel funding this year. The company announced a seed investment of US$ 2 million from the Aspada Investment Company in June 2014. Aspada is backed with a significant commitment from the Soros Economic Development Fund (SEDF).