California-based Drip Capital, a digital cross-border trade finance platform for small and medium businesses, has raised $175 million in fresh capital as part of its Series C investment round led by San Francisco-based TI Platform.
Others which participated alongside include new and existing investors including Accel, Sequoia, Wing VC, Irongrey and GC1 Holdings, the company said in a statement.
The fundraise includes a $40 million Series C investment and $135 million in warehouse debt facilities to power its next phase of growth, it added.
It has obtained a $100 million warehouse credit facility with UK's Barclays Investment Bank and a $35 million increase in the existing facility (initially $40 million) with California-based East West Bank.
The company, founded by Pushkar Mukewar and his Wharton MBA classmate Neil Kothari in 2016, leverages machine learning and cloud technology to fund cross-border transactions of small and medium companies. This helps the companies free up working capital and invest in growth.
It serves such firms across India, Mexico, and US, providing access to collateral-free credit.
Till date, Drip Capital has financed more than $2 billion worth of global trade transactions currently working with over 3,500 sellers and buyers spanning 80 plus countries.
In July 2019, it had raised $25 million (Rs 172 crore) in its Series B round of funding led by existing investor Accel, which is a global venture capital firm. New investors Trusted Insight and GC1 Ventures and existing investors Wing VC, Sequoia Capital India and Y Combinator also participated in the round.
Drip Capital had raised $15 million in a Series A funding round from Accel, Sequoia India, Wing VC and others in June 2018. Previously, it also received $5 million in seed funding from Y Combinator, Accel and others.
With the latest round, it has raised about $525 million in equity and debt funding so far.
Drip Capital will use the new funding to scale its business over the next 18 months.
“It will invest in products and technology and accelerate go-to-market in existing and new geographies like South Asia and Latin America,” the company statement said.
Following the fund raise, the company also plans to launch a new trade facilitation platform designed to alleviate the pain points of small businesses while collaborating with participants across the value chain, including shipping lines, payment processors, and insurance providers.
"The COVID-19 pandemic has put severe pressure on cash flows of exporters and importers alike. This strain is being felt most by small and medium businesses who have never had easy access to capital… We are excited to welcome TI Platform to help further our mission to make global trade easy and accessible to SMBs across the world,” said Mukewar.
Alex Bangash, managing partner of TI Platform, said, “Global trade finance is expected to be a $10 trillion market by 2026. Drip is comfortably established as the market leader in this space, providing SMEs with vital access to financing. Based on strong unit economics, powerful tech-driven underwriting, and growth trajectory, TI Platform considers it as a good candidate for breakaway upside.”
Of Drip’s 250 workers, about 200 are in Mumbai where its technology is developed, and the rest in locations including Mexico City and Palo Alto, California in the US.