Google has invested in progcapan Indian startup that provides working capital to small and medium-sized businesses, the companies said Tuesday, taking another step in a category that has caught the attention of Facebook and Amazon in recent years.
The investment is part of new $40 million financing that Progcap has raised, it said. Creation Investments and Tiger Global led the Series C financing round of the 5-year-old startup, which nearly tripled its valuation to $600 million since September last year. Existing lender Sequoia India and Southeast Asia also participated in the round, Progcap said.
The new investment extends to the startup’s $70 million Series C, the first tranche of which closed in September. With the new funding, the Delhi-headquartered startup’s all-time raise has risen to over $100 million.
Progcap serves more than 700,000 small retailers across hundreds of Indian cities and towns. The startup is extending a $10,000 to $12,500 revolving line of credit to retailers, providing them with much-needed capital to purchase new inventory and grow their business.
As we wrote earlier, a significant number of retailers in India are struggling with access to working capital. “The gap in the working capital financing market is about 98%,” said Pallavi Shrivastava, co-founder of the startup, in an interview with londonbusinessblog.com. “The market is completely disorganized and insufficiently addressed.”
The startup, which uses its proprietary insurance technology and access to retailers’ finances to determine their creditworthiness, also provides retailers with tools to check their statements and invoices, as well as ways to make online payments and track payouts.
Progcap aims to “become a full-stack retailer-focused digital bank that digitizes, automates and facilitates the movement of capital across the supply chain,” she said.
Over the past 4 years, Progcap says it has paid out approximately $1 billion to retailers operating across a wide range of industries, an amount currently on track to pay out this year. The retailers Progcap serves have an annual cash flow of about $125,000, the startup said.
“We are pleased that our existing investors have continued to deepen their belief in Progcap and are delighted that Google has joined us on this journey,” said Shrivastava and Himanshu Chandra, the other co-founder of Progcap.
“Progcap will become the primary driver for all of its clients’ transactions, providing them with credit and technology solutions that make their businesses more efficient.”
Google, which already serves many of these small businesses, is the latest company to show interest in helping these retailers with their finances. Facebook launched a program in India last year to help small and medium-sized businesses obtain loans.
The social giant has partnered with Indifi, backed by the CDC Group, to provide small ticket loans – ranging from Indian 500,000 rupees ($6,720) to 50,000,000 ($67,200) – at a predetermined interest rate of 17% to 20%. % per year and will not require the companies to provide collateral or participation fees, it told londonbusinessblog.com.
“We are delighted to reinvest in the Progcap team as they expand their product offerings and further serve last-mile retailers in India,” said Tyler Day, a partner at Creation Investments, in a statement.