Bangalore-based Capital Float, an online lending platform which makes the entire process of raising financial assistance for Indian SMEs a breeze, has scooped up a $13 Million Series A funding round, led by Sequoia Capital and SAIF Partners. The round saw previous investors Aspda returning to share the Series A capital raise.

Capital Float is an online lending platform that provides working capital finance to SMEs in India. They offer flexible, short-term loans that can be used to purchase inventory, service new orders or optimise cash cycles. Borrowers can apply online in minutes, select desired repayment terms and receive funds in their bank accounts in 7 days with minimal hassle.

Co-Founded by Sashank  Rishyasringa, an ex-McKinsey manager and Gaurav Hinduja, ex-COO at one of India’s largest apparel manufacturer Gokaldas Exports, Capital Float aims to solve the most gruelling pain in India’s SME ecosystem, i.e., raising working capital. Making the entire process online not only makes it paper-free (which, trust me, is a BIIIG relief in India), it also makes the entire process extremely stream-lined.

As of today, the company claims to have helped Indian SMEs with over $6 Million in financial assistance, with its operations spanning in 1 major Indian cities. Out of that $6 Million, it is India’s burgeoning e-Com market which has been gulping maj, which has been Most of Capital Float’s clients currently include small vendors who sell their products on either of India’s biggest e-com names – Flipkart, Snapdeal, eBay or Amazon.

However, the company is now aiming to launch products, which are tailor-made for small offline stores, so as to help them in scaling up their businesses.

Out of all the applications submitted, around 20% to 30% get approved based upon some 2,000-odd data points. These data-points include you general credit bureau scores and Capital Float’s technology scores applications based on online data. This online data takes into account various criteria w.r.t. an SME’s like customer feedback, transaction history among others.

Capital Float founders say that its interest rates are similar to banks, though they sometimes range in about 16 percent to 18 percent. But then, they are compensated by a much faster application process.

Those who apply for a loan at Capital Float, usually get a response within 7 day of their application, as compared to over 2 months in a traditional bank process. However, private moneylenders, which still comprise for a large share of India’s lending segment,  generally revert back in 2-3 days. Capital Float aims to bring down its application processing time to that amount.


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