Capital Float, a finance technology startup which helps SMEs secure capital online, has raised close to ₹17 crore in a round led bt IFMR Capital Finance and its alternative investment fund. Unlike others, this is not a private equity deal. The company has raised money by allotting non-convertible debentures (NCDs).
NCDs are basically loan-linked bonds but cannot be converted into stocks. They, however, offer a higher rate of interest than convertible debentures. With this new fund coming to the company, the total amount raised by them so far comes to around ₹60 crore.
Capital Float allotted NCDs to IFMR Capital Finance and IFMR Fimpact Long Term Multiasset Fund in December last year, as revealed by the documents filed with the registrar of companies. As per the company, the new capital will be used to lend to existing and new small and medium enterprises (SMEs) on its platform.
Commenting on this funding, Sashank Rishyasringa, co-founder of Capital Float, said to Economic Times,
The NCD raise is for strengthening our lending books. This will enable us to fulfil the working capital requirements of SMEs; for both repeat borrowers from our existing customer base and for new customer acquisition.
This NCD raise is in line with our overall strategy to deepen our liability side and will help us in achieving much better assets and liability management (ALM). We are always on the lookout for an opportune time to raise NCD at competitive borrowing rates.
Founded in 2013 and based in Bangalore with offices in New Delhi and Mumbai, Capital Float is an online platform that provides working capital finance to SMEs in India. It offers flexible, short-term loans that can be used to purchase inventory, service new orders or optimize cash cycles.
The Bangalore-based company’s mission is to bridge the current gap in the market with innovative and flexible credit products for SMEs, delivered in an efficient and customer-friendly manner.
Last year, the company had raised $25 million in Series B round. Prior to that, in February 2015, it had raised $13 million in its Series A round from SAIF Partners and Sequoia Capital, to expand into more cities, improve its tech platform, and launch new products. Even before that, it had raised $1 million in August 2015 and $2 million in June 2015 as a part of seed funding round.