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 $13 million (Rs 81 crore) in Series A funding from Sequoia Capital with participation of existing investors SAIF Partners and Aspada, it said on Wednesday.
The funds will be used for expanding into more cities, improve its tech platform and launch new products.
"The use of technology and data will transform lending to businesses and consumers. The technology that Capital Float has built enables meaningfully faster and better decision-making," Gautam Mago, managing director, Sequoia Capital India, said.
Capital Float was founded by Sashank 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.
Last year the company had raised $1 million from SAIF Partners. Prior to that, it had 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.
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, 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.
"We've focused on building the platform to deliver flexible and convenient access to finance that can scale with their business (borrowers). By leveraging alternative data in our underwriting model, we are increasingly able to not only make faster decisions but also lend to emerging business models," said Hinduja and Rishyasringa in a joint statement.
To date, the platform claims of having lent nearly Rs 40 crore to SMEs across more than 10 cities in India. Most of the loan applications come from vendors on marketplaces such as Snapdeal, Flipkart, Amazon, PayTM and Myntra.
Besides Bangalore, the firm also has offices in Mumbai and Delhi.
Capital Float competes with another Bangalore-based firm Lendingkart.