Indian e-commerce major, Amazon has invested Rs. 144 crore( $22 million) in Capital Float, a platform for lending to small & medium enterprises (SME’s).
This is Amazon’s third investment in financial landscape after BankBazaar and Qwikcilver Solutions.
Founded in 2013 by Sashank Rishyasringa and Gaurav Hinduja, alumni from Standford University, Capital Floats raised funding round which was a part of Series C exercise raised by the company last year.
The company had also raised $45 million i.e nearly Rs. 299 crore in last year in August and now will be utilizing the money to promote innovations and build proprietary underwriting algorithms.
Capital Float has 20% of its customer base from e-commerce sellers and vendors thus making Amazon be one of its biggest customers. This latest investment aligns well with the strategy to get a stronger hold on India’s fintech space.
Amazon has been quite enthusiastic about investing in startups to expand its customer outreach. Earlier this year too, the company was in talks to invest in an online insurance startup Acko.
Stressing on the fact that the round is independent of its business relationship, Gaurav Hinduja said,
We have been working with Amazon by financing sellers on their marketplace.We’ve successfully added new products in past 6 months and have crossed Rs1,200 crore in overall loan portfolio outstanding.
Capital Floats has mainly focused on small and medium enterprises and has recently started financing grocery stores and proprietors. The company isn’t involved in direct consumer investment.
Amazon India’s SVP and Country Manager said,”Credit in India is highly underpenetrated and Capital Float is bringing the right kind of credit solutions to the underserved and informally served segments of SMEs to help realize their full potential.The company has a good hold in digital space and possess strong data-driven approach to lending.”