Capital Float secures $25-M Series B funding led by Creation Investments Capital Management

Capital Float, the online lending platform for small and medium-sized enterprises (SMEs), raised $25 million in a Series-B funding, led by Creation Investments Capital Management LLC. According to a statement released by the company, the round saw participation from its existing investors Sequoia, Aspada and SAIF Partners. This is the third round of funding for the company, which has raised $42 million so far. The Series-A funding raised $13 million in February.

Ravi Adusumali, Managing Partner, SAIF Partners said that after working with Capital Float for some time now, they believe that the team has created a distinctive technology-led platform for lending to SMEs across India.

With this round of funding, the team intends to expand its lending footprint across 100 cities and over 20,000 SMEs, apart from introducing newer financial products. Additionally, this round also help the company expand its capital sources.

On the investment, Patrick Fisher, Managing Partner and Founder, Creation Investments, said that Capital Float had used technology to create a differentiated model, making it possible to deliver credit to the smallest businesses in a scalable and efficient manner.

Gaurav Hinduja and Sashank Rishyasringa, Founders, Capital Float, said that the advent of the smartphone has made it easy for people to apply for a loan from anywhere and have their creditworthiness analysed within minutes. A loan could now be approved and disbursed within an hour.

Kartik Srivatsa, Managing Partner, Aspada added that Capital Float has built some great loan-cycle automation tools and has emerged as one of the most advanced credit underwriting engines in the last 18 months, with a deep understanding of the SME ecosystem, making it easier to provide loans to the segment.

In the past three years Capital Float has disbursed close to over Rs 250-300 crore and has over 1,000 customers in 40 cities across the country. The interest on loan amount varies from 16 to 19 percent. This depends on the risk assessment of the individual. The team also takes on a fee income, which is one to two percent on processing a loan.

The past couple of months have seen the advent of several online lending platforms and fintech companies. Apart from Capital Float, there is Matrix Partners-backed Finomena, Kalaari Capital-backed Rubique, Elevar Equity-backed CreditMantri and many others. By the end of 2014, there were investments worth $ 12 billion made in the space and now the market is said to be growing at 48 percent on a year-on-year basis.

Gautam Mago, Managing Director, Sequoia Capital believed that there is a global shift towards technology and businesses transformation when it comes to lending.