Capital Float, a digital lending startup which helps SMEs and start-ups secure capital online, has today secured a hefty ₹15 crore from Mahindra and Mahindra Financial Services. As for the funding, the company has allotted non-convertible debentures (NCDs) to the investor.
The new fund-raising comes just months after the company raised ₹17 crore in debt funding from IFMR Capital Finance and its alternative investment fund. The said fundraising round was also raised by allotting NCDs to the investor.
NCDs are loan-linked bonds that cannot be converted into stocks but offer a higher rate of interest than convertible debentures. For companies seeking to raise money through NCDs have to get themselves (or more broadly — their business) rated by agencies such as CRISIL, ICRA, CARE and Fitch Ratings.
As per the documents filed by the company with the registrar of companies (RoC), Capital Float has allotted rated, unlisted, taxable, senior, redeemable NCDs to Mahindra and Mahindra Financial Services.
The total capital raised by Capital Float through NCDs in the year 2016-17 now stands at ₹60 crore. The company’s primary mission is to bridge the current gap in the financial market with innovative and flexible credit offerings for SMEs, delivered in an efficient and customer-friendly manner.
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 which can be used to purchase inventory, service new orders or optimize cash cycles.
Last year, the company had raised $25 million in Series B round. Prior to that, in February 2015, it raised $13 million in its Series A fundraising round from SAIF Partners and Sequoia Capital, to expand into more cities, improve its technology platform, and launch new products. It had also raised $1 million in August 2015 and $2 million in June 2015 as a part of its seed funding round.
The company recently partnered with Amazon India to enable e-commerce sellers to manage their dynamic working capital requirements. As per the company, e-commerce revenue is expected to significantly jump from $30 billion in 2016 to $120 billion in 2020, growing at an annual rate of 51 percent. Thus, digital lenders like Capital Float will play an integral role in creating an inclusive financial ecosystem for merchants to support this growth.
