Drip Capital secures $113M to expand trade finance solutions and disbursals
The round comprised equity funding from GMO Payment Gateway and Sumitomo Mitsui Banking Corporation, and debt financing from IFC and East West Bank.
Cross-border trade finance fintech Drip Capital has secured $113 million in new funding, including $23 million in equity from Japanese investors GMO Payment Gateway and Sumitomo Mitsui Banking Corporation (SMBC).
The remaining $90 million was raised through debt financing led by the International Finance Corporation (IFC) and East West Bank.
"The new funding will be used to expand Drip’s trade finance solutions and venture into trade facilitation. We aim to leverage our existing network to offer additional services like forex and sourcing, beyond our core trade financing products," Pushkar Mukewar, CEO and Co-founder of Drip Capital, told YourStory in an interview.
The equity portion will mainly support product expansion, capacity building, and enhancing Drip Capital's tech stack, while debt funding will be used to scale up disbursals, it said in a statement.
Drip Capital is a fintech company focused on addressing the working capital needs of SMEs engaged in cross-border trade mostly in sectors like agro commodities, food processing, textiles, industrial goods, chemical manufacturing, and solar manufacturing.
These businesses typically have revenues ranging from $1 million to $50 million annually and access credit lines from Drip between $50,000 to $3 million, covering 20-25% of their working capital needs.
The SME finance sector is a critical component of global economic growth, particularly in emerging markets like India, where SMEs contribute 40-45% of the country’s exports as per data from the MSME Ministry.
However, access to credit remains a significant barrier for many of these businesses. Traditional banks often view SMEs as high-risk, leading to a persistent credit gap.
Fintech companies like Drip Capital are stepping in to fill this gap, leveraging technology and alternative data sources to build efficient, scalable, and low-cost financing solutions. "We’ve been able to tap into global data sources and build a credit underwriting process where we assess the seller, the buyer, the transaction in an automated way," Mukewar said.
Drip Capital offers two major product offerings: receivables discounting, which allows SMEs to unlock working capital tied up in unpaid invoices, and supply chain finance, which facilitates payments to suppliers by enabling buyers to receive extended credit through Drip Capital’s platform.
Drip Capital operates globally, with a significant presence in India and the US, accounting for about 55-60% and 35% of its business, respectively. The platform serves SMEs across over 100 countries, facilitating trade for more than 10,000 sellers and buyers worldwide.
While the US is a key market for exports, Drip Capital also works with importers, particularly those sourcing from China, Asia, and Latin America.
"While geographical expansion beyond India and the US is not an immediate priority, our focus will be on deepening our presence and product offerings in these core markets. We will continue to build on our existing strengths, refine our technology and risk management processes, and leverage our established customer base," Mukewar said.
"Our plan is to build on our existing strengths, leverage our established customer base, and continue refining our technology and risk management processes. We are targeting a growth rate of about 40% next year and the year after, supported by this funding," he added.
Edited by Kanishk Singh