Drip Capital counts Accel Partners, Sequoia Capital, Wing VC amongst its investors. (Photo supply: IE)
Credit and Finance for MSMEs: Y Combinator-backed smaller and medium enterprise (SME) focused trade finance enterprise Drip Capital has crossed the $1-billion milestone in cross-border trade receivables financing transactions via its platform. Founded in 2015, Drip delivers post-shipment finance on the worth of the exporter’s invoice at the time of bill of lading is issued. Bill of lading is a document detailing the variety, quantity, and location of the goods becoming carried. The exporter is necessary to spend a 1-time processing charge, a factoring charge charged for each and every invoice, and interest ranging in between 4.5 per cent and 9 per cent per year.
“As India relaxed its lockdowns and demand started returning from consumer-oriented economies such as Europe and the US, MSMEs need for working capital has increased. This further underscored the need for alternative financing solutions like the ones Drip Capital provides. The company has recorded a 50 per cent quarter-on-quarter growth in the last three quarters,” Pushkar Mukewar, Co-Founder and CEO, Drip Capital told TheSpuzz Online.
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Unlike regular economic institutions, Drip Capital claimed to leverage information analytics and technologies to underwrite credit. It is working with more than 1,500 sellers and purchasers globally and more than 700 exporters across 60 cities in India, according to the enterprise. Drip has so far secured close to $200 million in equity and debt considering the fact that 2016. It counts Accel Partners, Sequoia Capital, Wing VC amongst its investors apart from Y Combinator.
The government had also been urging MSMEs to onboard the TreDS platforms such as the Receivables Exchange of India, M1xchange, and Invoicemart to additional unlock the worth of their invoices and ease the working capital crisis. It had waived the Rs 10,000 charges in September final year for onboarding the TReDS platforms till March 2021. The government had also integrated the new portal for registration of MSMEs — Udyam Registration with TReDS and government e-commerce platform GeM for seamless transactions. The MSME ministry had also reminded private firms to join TreDS to resolve the delayed payment concern, as it was created mandatory by the government in 2018 for all CPSEs and corporates with more than Rs 500 crore turnover.