Drip Capital raises $15M from Sequoia Capital, Accel Partners & others

Financial technology startup Drip Capital has raised $15 million (about Rs 100 crore) in a new round of funding, bringing on board marquee venture capital firm Sequoia Capital as a new investor, with existing backers Accel Partners and Wing VC also participating.

The Palo Alto and Mumbai-based company, which has now raised a little over $20 million in equity financing since inception, also disclosed that it had raised $5 million in its seed round in January last year, which saw the entry of Accel Partners, Wing VC and Y Combinator on to its investor cap table.

“We launched in India about 18 months ago. Our target market has been India, but the product we have built was to solve the working capital gap for SMEs and exporters across emerging markets,” Pushkar Mukewar, co-founder and co-CEO of DripCapital, told ET. “The main focus will be to continue building out our sales presence and expand in India, and also launch the model in other emerging market geographies.”

Additionally, Drip Capital, which is currently looking at entering Latin America and Southeast Asia, has also raised an undisclosed sum as debt financing from Silicon Valley Bank (SVB) and other entities.

“We have raised debt capital from SVB and other investors in the US, and that capital will essentially be used to help build our lending book,” Neil Kothari, co-founder and co-CEO of Drip Capital, told ET. The company launched its wholly-owned Indian subsidiary, Drip Capital Services India, in December 2016.

“With a partner like Drip Capital, emerging market exporters now never need to say ‘no’ to a new order due to working capital constraints… This offers a huge boost to small and medium businesses, which play such a significant role in India’s trade network,” Mohit Bhatnagar, managing director at Sequoia Capital India, said in a statement.

Founded in 2014 by Wharton School alums Mukewar and Kothari, Drip Capital, which has also opened offices in Delhi and Bengaluru, provides working capital finance, without collateral, to small and medium enterprises, with a particular focus on export-oriented ventures.

The four year-old startup, offers a credit line to SME exporters, across sectors and including agro-commodities, industrial goods and textiles, among others, allowing them to draw against the same every time they have a shipment going out.

According to Mukewar, SMEs have to fill out an online document that requires minimal documentation. Additionally, given that these are primarily cross-border transactions, Drip Capital also assesses the risk of the buyer, using electronic data and automated risk assessment platforms.

According to the founders, Drip Capital has disbursed over $100 million of trade flows across industries in the last 18 months of operation. The credit lines range between $100,000 and $2.5 million.