Bangalore-headquartered Zen Lefin Pvt Ltd, the company behind Capital Float, an online platform that provides working capital finance to SMEs (small and medium enterprises) in India, has secured $1 million in funding from private equity firm SAIF Partners.
This funding comes just a month after the firm netted $2 million in investment from Bangalore-based Aspada Investment Company, a provider of long-term, growth capital to entrepreneurs who address large market needs.
"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. Even today, many entrepreneurs prefer to borrow from informal sources for their convenience and speed. Our goal is to make the process of getting a business loan as simple as shopping online," said Sashank Rishyasringa, co-founder of Capital Float.
Capital Float was founded by Rishyasringa and Gaurav Hinduja—both hold MBA degrees from Stanford University. Hinduja had worked at Gokaldas Exports, while Rishyasringa was an engagement manager at McKinsey & Company prior to starting Capital Float.
Capital Float works with underserved small businesses via a technology-led loan origination and credit underwriting platform. It provides short-term loans to SMEs that can be used to purchase inventory, service new orders or optimise cash cycles. Borrowers can apply online in a short time, select desired repayment terms and receive funds in their bank accounts in seven days. The firm caters to SMEs across a variety of sectors, including manufacturing, services and e-commerce.
"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," said Ravi Adusumalli, managing partner at SAIF Partners.
SAIF Partners is a leading VC & PE firm, and manages over $1 billion of investments in India. It has a portfolio of over 30 companies, including Makemytrip, JustDial, HomeShop18, One97, Speciality Restaurants, Havells, Karur Vysya Bank, Mindtree and IPCA Laboratories. SAIF recently invested $1.7 million in Noida-based Holiday Triangle Travel Pvt Ltd, the company behind TravelTriangle.com, an online marketplace for travel agents.