It is a surprising fact that out of the ratio of 50 million SMEs (Small and Medium Enterprises), only around 6-7% of the SMEs manage to get the adequate funding for themselves. As the Indian startup industry is blooming, the entrepreneurs are using the new technological applications to get the hold of the newest trends in the startup industry.
There are a plethora of top players like Oxigen, Paytm, Mobiqwik and various others that have emerged and wish to cater the retail customers with reduced payment issues on the online platform. Various new-age companies that are based on technology like Capital Floats, Innoviti, Pine Labs and various others have emerged out with ways to ease the payment methods of the SMEs in India.
Capital Float that is a Bengaluru-based has raised as much as $17 million in the form of funds from SAIF Partners, Sequoia Capital, and Aspada. The company has also been utilizing the equity to get the finances in the form of loans from the banks and various other lenders. The revenue model of this company can be considered to be a combination of fees and interests.
The Managing Director of the Sequoia Capital, Gautam Mago, claims that the SME lending market in India is massive and there is a myriad of the under-served markets of $200 billion that is not addressed by the traditional lenders. In addition to this, technology in this sector has also not evolved in a substantial manner. The borrowers today are highly dominant on the online portal which implies that the lenders can target them on the online platform. The use of new data and technology can help in underwriting the loans in a faster and better manner.
Capital Float that has been founded in the year 2013 has led to the creation of the propriety platform that can help in the evaluation of the financial conditions of an SME. Capital Float also provides the working capital requirements in about a span of seven days. The traditional banks, on the other hand, take around two months. In the recent scenario, the company is working with the leading e-commerce players like the Amazon, Flipkart, Jabong, Snapdeal, Myntra and even more. The company also works with the business to business and small merchants service providers. Capital Float can be considered to be a registered non-banking financial company.
The Co-founder of Capital Float, Sashank Rishyasringa, claims that India has a huge segment of the SMEs wherein the lending and funding needs have been ignored to a significant level. The company has been created with the motive to focus on obtaining the details of the merchant as well as for the collection of documents in such a way that it is convenient for the underwriting team as well as for the applicants. The company also estimates that as much as $200 billion of funding is required for the development of the SMEs (Small and Medium Enterprises) in India to satisfy their working capital needs.