Drip Capital Raises $25 Million In Series B Funding From Accel, Sequoia, Others

Drip Capital, a fintech-based trade financier, has raised $25 million in fresh funding from Accel Partners, Sequoia India and others.

The Series B round also saw participation of two new investors, GC1 Ventures and institutional investor platform Trusted Insight, as well as existing investors including Wing VC and Y Combinator, the Palo Alto- and Mumbai-based startup said.

Drip Capital has now raised a total of $100 million—$45 million in equity and $55 million in debt.

"The funding will be used for global expansion over the next 12-18 months. Apart from India, we are already present in Mexico and the UAE and now we are looking to enter Southeast Asia as well," Pushkar Mukewar, co-founder and co-chief executive officer of Drip Capital, said in a statement on Wednesday.

The company will use a part of the fresh capital in technology and expand its sales and marketing team. It currently has an employee strength of 120.

According to Mukewar, Drip Capital has already funded over $500 million worth of trade to 400 exporters since its entry into India in 2016.

"By FY20, we aim to fund $1 billion of trade originating from the country," he said.

Drip Capital offers exporters a credit line ranging from $0.1 million to $2.5 million through both unsecured and unsecured route.

Drip Capital uses technology to provide working capital to small companies and entrepreneurs, a sector which accounts for 50 percent of merchandise exports from the country and employs millions.

Globally, Mukewar said, there is a trade finance gap of $1.5 trillion globally, majority of which is among small business exporters in emerging markets. That means so much of trade potential is lost for want of funding.

Drip Capital focuses on 10 industry segments, including agro commodities, readymades and industrial goods, and stays away from gems & jewellery and perishables (fruits and vegetables), Mukewar said.

Trade finance is a paper-based industry dominated by banks that primarily focus on large, established corporate customers. Drip Capital, however, uses electronic data and technology to underwrite and finance cross-border B2B deals.

Drip Capital has strategic partnerships with many key export promotion organizations, including the Federation of Indian Export Organizations and the Engineering Export Promotion Council.