November 30, 2022

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Google backs SME financing platform Progcap in newest $40Mn Sequence C fundraise

Regardless of India’s fintech infrastructure rising by leaps and bounds, credit score and financing for the SMB sector continues to stay a serious bottleneck. The class is marred by a number of roadblocks that SMBs discover onerous to navigate. Nevertheless, a number of up and coming startups have discovered profitable enterprise alternatives in the identical. This has additional already caught the attention of worldwide tech giants equivalent to Amazon and Fb (now Meta), and now, Google has joined the occasion.

Google marked its entry into the sector by changing into the most recent investor in company financing startup Progcap, which is thought to offer working capital to SMBs within the nation.

It joined Progcap because the business-to-business (B2B) lending platform scooped up $40 million in an extension of its Sequence C funding spherical, led by its present buyers Creation Investments, Tiger International Administration, and Sequoia Capital India and South-East Asia.

The full worth of the Sequence C funding spherical quantities to $70 million – together with the $30 million it raised within the first tranche of the C spherical in September 2021. This spherical additionally tripled the valuation of the five-year-old Progcap to $600 million – it was final valued at $200 million. It has raised over $100 million in funding up to now.

With India positioning itself as one in all its key markets, it’s hardly stunning that Google is broadening its push into the home market. Firstly of the yr, it was introduced that it will be pouring thousands and thousands of {dollars} – as much as $1 billion – into India’s telecom main Bharti Airtel as a part of its Google for India Digitization Fund.

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A few of its different main investments in Indian corporations embrace placing in $4.5 billion in Reliance Industries’ Jio Platforms for a stake of seven.7% and investing $145 million in Bengaluru-based InMobi’s mobile-first content material platform Look. It additionally teamed up with Jio to develop and roll out JioPhone Subsequent, touted to be probably the most inexpensive smartphone.

Going ahead, the New Delhi-based Progcap will deploy freshly raised capital to gasoline enlargement in new markets and increase the event of its app and merchandise because it intends to enter newer classes equivalent to serving companies in electrical and electronics and lending for manufacturing. It can additionally discover alternatives for acquisitions.

Progcap appears to be a sensible choice for an funding. Based in 2017 by Shrivastava and Himanshu Chandra, the startup at the moment supplies collateral-free working capital to over 700,000 SMBs. It claims to have about $1 billion to retailers previously 4 years alone.

Progcap additionally claims to have recorded annualized disbursals of $1 billion in FY22, one thing that’s rising by 4 instances year-on-year. Going ahead, it goals to develop into a full-stack retailer-focused digital financial institution that digitizes, automates, and eases capital motion throughout the provision chain to SMBs. It additionally seems to be to develop into operationally worthwhile within the coming months.