Capital Float, the fintech startup that claims to be India’s largest online lender, today announced it has raised $ 22 million in new funding from Amazon. Late last year, reports surfaced that Amazon was considering an investment in Capital Float as an extension of its $ 45 million Series C, announced last August. The Bangalore-based startup confirmed to TechCrunch that Amazon’s investment is indeed an extension of this cycle and brings the total equity it has raised in the past 12 months to $ 67 million.
During the same period, Capital Float also raised $ 80 million in debt from banks and other financial firms, which it combines with its own balance sheet to fund loans to small businesses and other borrowers. Amazon India is among many e-commerce platforms the company has partnered with to provide loans to sellers, including Snapdeal and Shopclues.
Since its inception in 2013 by co-founders Sashank Rishyasringa and Gaurav Hinduja, Capital Float has raised a total of approximately $ 110 million in equity from investors including Ribbit Capital, SAIF Partners, Sequoia India, Creation Investments and Aspada, as well as the total debt lines of $ 130 million.
In the past six months, Capital Float has added 50,000 new customers, bringing its total customer base to over 80,000 people in more than 300 cities. The startup says it currently disburses more than 10,000 loans each month and now has an outstanding loan portfolio of over $ 170 million, with a default rate of around 2%. About 70 percent of its loans are microloans ranging from 25,000 rupees to 500,000 rupees (approximately $ 376 to $ 7,530).
With Amazon’s investment, the startup has set an ambitious goal of adding 300,000 new customers and granting more than $ 800 million in loans this year.
In a press release, Amazon India Country Manager Amit Agarwal said, “We are delighted to be working with Capital Float and investing alongside other investors. We are very impressed with what Gaurav and Sashank have built and we are supporting missionary entrepreneurs and management teams. Credit in India is heavily underpenetrated and Capital Float brings the right kind of credit solutions to underserved and informally served SME segments to help them realize their full potential.
Over the past year, Capital Float has expanded into more verticals, including products for small and mid-size manufacturers, point-of-sale financing for retailers, and school construction loans and independent professionals such as doctors. He also added new online payment gateways to make it easier for borrowers to repay loans and started piloting deep learning-based underwriting models that use data points such as image processing, geo-tags and new policies such as the Goods and Services Tax (GST), a tax launched last year that is levied at every step of the production chain and the demonetization of banknotes started by the government of Prime Minister Narendra Modi in 2016.