Google backs Progcap, a startup delivering working capital to small retailers in India
Google has invested in Progcap, an Indian startup that provides working capital to small and medium-sized businesses, the firms said Tuesday, making a new push into a category that has attracted the attention of Facebook and Amazon in recent years.
The investment is part of a $40 million fresh funding Progcap has raised, it said. Creation Investments and Tiger Global led the 5-year-old startup’s Series C financing round, which nearly tripled its valuation to $600 million since September last year. Existing backer Sequoia India and Southeast Asia also participated in the round, Progcap said.
The new investment extends to $70 million, the startup’s Series C, the first tranche of which it closed in September. With the fresh funding, the Delhi-headquartered startup’s all-time raise has surged past $100 million.
Progcap serves more than 700,000 small retailers, who dot hundreds of Indian cities and towns. The startup extends a revolving credit line of $10,000 to $12,500 to retailers, providing them with much-needed capital to buy new inventories and grow their businesses.
As we have previously written, a significant number of retailers in India struggle with access to working capital. “The gap in the working capital financing market is around 98%,” said Pallavi Shrivastava, co-founder of the startup, in an interview with TechCrunch. “The market is completely unorganized and insufficiently addressed.”
The startup, which uses its own underwriting tech and access to retailers’ finances to determine their creditworthiness, also provides retailers with tools to check their account statement and invoices, and provides ways to make online payments and track disbursals.
Progcap aims to become “a full-stack retailer-focused digital bank that digitizes, automates and eases capital movement across the supply chain,” she said.
In the past 4 years, Progcap says it has disbursed about $1 billion to retailers, which operate in a wide-range of sectors, a figure it is currently on track to disburse this year. The retailers Progcap serves have a yearly cash flow of about $125,000, the startup said.
“We are delighted that our existing investors have continued to deepen their conviction in Progcap and thrilled that Google has joined us on this journey,” said Shrivastava and Himanshu Chandra, Progcap’s other co-founder.
“Progcap is becoming the core operating engine for all the transactions of its customers, 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 firm 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 secure loans.
The social giant is working with CDC Group–backed Indifi to give small ticket loans — ranging between 500,000 Indian rupees ($6,720) to 50,00,000 ($67,200) — at a predefined interest rate of 17% to 20% per annum and won’t require the businesses to provide any collateral or joining fee, it told TechCrunch.
“We’re delighted to invest once again behind the Progcap team as they expand their product offering and further serve last-mile retailers in India,” said Tyler Day, a partner at Creation Investments, in a statement.
Progcap is by all accounts an inspiring startup with spurring development on financial services platform. I’m certain this startup would keep on flourishing in its excursion ahead. All the best to the whole group of Progcap. This will give them a colossal achievement in the future.Shishir Gupta, Founder and CEO, StartupLanes
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