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Short-term working capital provider KredX secures $6.25 million in Series A from Sequoia and others

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KredX, a startup which helps small businesses get short-term working capital by discounting their unpaid invoices, has announced that it has raised $6.25 million in Series A round of funding.

The funding round was led by Sequoia Capital India, along with the company’s existing investor  — Prime Venture Partners, an early stage investment firm. The new capital coming to the company will be used to strengthen the technology, data and sales functions within the company.

It also marks yet another investment from the extremely cautious Sequoia India this year, after it did rampant investments in multiple businesses last year.

KredX, which was formerly known as Mandii, was founded in 2015 by IIT & Stanford alumni Manish Kumar, Anurag Jain & Puneet Agarwal. The platform helps businesses to meet their short-term working capital needs by discounting their unpaid invoices to a network of buyers/financiers including banks, NBFCs, wealth managers and retail investors.

Commenting on this, Shailendra Singh, MD of Sequoia Capital, said:

We see Kredx as a marketplace enabling trade finance, and we love the fact that the team is narrowly focused on solving one problem very keenly and clearly. The company is transforming the informal lending market to a new invoice discounting marketplace for enabling institutional credit to small and medium sized businesses.

The startup has built a technology marketplace, using which it connects small and medium enterprises (SMEs) with investors who are willing to buy the unpaid receivables to help them with their working capital cycles.

So far, the company has enabled around 3,000 transactions ranging from Rs 1 lakh to Rs 1 crore, with a focus on unpaid invoices from “blue-chip companies”. KredX sees the invoice discounting market as a $100 billion opportunity .

Manish Kumar, CEO and co-founder of KredX, said,

Access to working capital for sustained growth and production is critical to businesses and late payments are often a huge bottleneck. Last year, almost 97 percent of the Indian SMEs reported having experienced late payment of their invoices, while 56 percent dealt with working capital issues due to late payment or unavailability of credit.

For Sequoia Capital India, fin-tech has proved to be one of the most lucrative sectors. In this sector, it saw exits like FreeCharge, which was acquired by Snapdeal for $400 million, along with Prizm Payments  — which was acquired by Hitachi for $250 million. Recently, Citrus Pay has also saw itself being acquired by Naspers-backed Payu.

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