Drip Capital funding
Drip Capital, an Accel and Sequoia-backed fintech player has acquired a $40 million (about Rs 290 crore) warehouse credit line from the California-based East-West Bank to extend its trade finance solutions to small businesses.
Founded by Indians, the California-based Drip Capital deals with cross-border trade finance. India is its largest market, followed by the US where it mostly deals with buyer finance, and Mexico.
Pushkar Mukewar, Co-founder and Chief Executive Officer of Drip Capital, told PTI that the partnership with East-West Bank symbolizes an important milestone for us and will further boost our ability to offer swift and seamless financing to global exporters and importers.
About 50 percent of the credit line will be extended in India, he added.
The credit line is an asset-based facility and enhances Drip Capital’s financing capacity to help influence the next phase of growth.
Drip Capital provides trade financing solutions in the US and developing markets like India and Mexico by providing their clients access to working capital quickly.
It works with more than 1,500 sellers and buyers spread across more than 80 countries and has so far financed over $1.2 billion of international trade since its conception in 2016, Mukewar said.
In the US, Drip mostly offers buyer finance such as supply chain and inventory finance, to small importers while in India and Mexico it provides seller finance. It lends collateral-free and is fully digital.
Drip has acquired about $200 million via venture capital and debt since 2016, including more than $45 million in equity through investors like Accel Partners, Sequoia Capital, Wing VC, and Y Combinator.
While Drip started with India four years ago, it entered Mexico in 2019 and is also services exporters in Ecuador, Bangladesh, and the UAE.
Mukewar said Drip prices nearly one percent of the financed amount depending on the ticket size, which averages around $40,000 duration and nature.
East-West Bank is traded on Nasdaq with total assets of more than $50 billion. It provides commercial and consumer banking services across key US and Chinese cities.
Mukewar stated that his clients include commodities exporters who are into spices, ready-mades, and industrial goods.