Delhi-based cash-flow management SaaS platform Credflow has become the latest firm to raise funds in a market that is currently loving the Indian startup ecosystem. The company has raised $2.1 million in a seed funding round led by Stellaris Venture Partners, Omidyar Network India, and Flourish Ventures. Marquee angel investors like Nitin Gupta also participated in the round.

Kunal Agarwal, the founder of Credflow, said that delayed collections remain a major challenge faced by Indian SMEs, and capital that was stuck in receivables was one of the premier causes for financial stress. “Indian SMEs, particularly traditional manufacturing and distribution businesses in the B2B supply chain are still using archaic, offline processes to manage their receivables and payables. Much of fintech innovation in the past decade has been focused either on large enterprises or retailers and micro-enterprises, while the mid-market B2B segment remains largely unaddressed. We’re excited to partner with Omidyar Network India, Stellaris Venture Partners, and Flourish Ventures in helping us leverage technology to realize this mission of making Indian SMEs truly Aatmanirbhar,” he said.

Credflow, whose aim is to “build a full-stack solution including cash-flow based financing, treasury management, and payments management to help SMEs optimize their cash-flows and accelerate their growth,” helps B2B (business-to-business) SMEs (Small and Medium Enterprises) manage their finances, providing a dashboard of pending amounts by the customer, sending timely payment reminders, validating invoices and negotiating discounts for early payment, thus enabling these businesses to reduce their working capital cycles by 25-30%. It has come a long way in a short time since its inception, and by long, we mean long. Over 5, 000 businesses have used Credflow to process and sync invoices worth more than ₹70,000 crores.

Treasa Matthew, director of Omidyar Network India, feels that Credflow’s focussed solutions would significantly improve the financial health of Indian SMEs, as well as accelerate their growth by empowering SME business owners with cutting-edge digital tools and analytics to manage cash-flows efficiently. “For the past two decades, average debtor days for Indian SMEs have consistently exceeded 90 days. While the sector has begun digitizing and formalizing rapidly, cashflow management remains a chronic pain point,” Matthew said.” Kunal and his team are passionate about solving for the critical needs of SME business owners, who are the largest employers of the Next Half Billion. We are delighted to partner them in this journey,” she added.

Fintech start-up Credflow is on the track of becoming a leader in the field, but that means it will have to contend with the big players like Paytm and RazorPay. The Indian fintech market is one of the fastest-growing ones in the world, and the overall transaction value in the Indian fintech market is expected to reach $140 billion in 2023.

The company, which is aiming to expand its team across marketing, product, and technology, will be investing in platform development, strengthening its tech capabilities, and building new products as it focuses on expanding its customer base, according to a press release.