Alpha Capital invests in supply chain finance startup CredAble

Mumbai-based supply chain financing startup CredAble has raised Rs 100 crore ($14.8 million) in a Series A round of funding from Alpha Capital.

The startup will primarily deploy the funds to expand its loan book, it said in a press statement.

Currently, the company enables lending through its partner networks of financial institutions. It is in the final stages of gaining a non-banking finance licence, post which it will start lending from its own book, Nirav Choksi, co-founder and chief executive officer, of the venture told TechCircle. The company will also invest on strengthening its technology and team.

CredAble helps vendors receive early payments against their approved invoices, without waiting for the typical credit cycles of 45-90 days. It currently focuses on small and medium enterprises in the logistics and packaging materials space.

It also offers a corporate solution named ‘Receivables Xchange’ (RX), a digital platform for large companies that allows their vendors to gain instant access to working capital. The platform has a network of financial institutions who bid for the invoices from the vendors.

“We are able to enable significantly large amounts of working capital for the vendors, taking the credit equations out of the picture for SMEs. Vendor relationship management is the best benefit the solution provides to corporates as their entire vendor base including the long-tail can get easy financing. Besides, we help them extend their days payable outstanding (DPO) and drive their EBIDTA savings,” Choksi said.

CredAble claims to have enabled over Rs 108 crore in supply chain financing across 41,000 transactions to over 9,000 vendors. Parle Products and Keys Hotels are two of its early corporate clients.

CredAble was founded by Choksi and Ram Kewalramani in March last year. Choksi is a serial entrepreneur who currently runs two other ventures – Equentia Natural Resources, a Singapore-based diversified trading and resource company specialising in seaborne coal, and HHC Holdings, a family office fund and investment company based in Singapore and Mumbai. Kewalramani has previously worked with management consulting firm Grant Thornton and financial services firm Centrum Capital.

Choksi said the company wants to focus on lending larger amounts to a relatively fewer number of vendors, while on the corporate side, it wants a significant portion of the vendor base of its corporate partners to flow through the platform. The company works with corporates whose annual payments fall anywhere between Rs 4,500 crore and Rs 6,000 crore.

Founded by Vishal Ootam and Vivek Anand, Alpha Capital is an investment management firm based in Mumbai. The company is backed by Sat Pal Khattar (Khattar Wong – Singapore), Darshan Patel (Vini Cosmetics), Mohandas Pai (former CFO and HR head at IT major Infosys) and Ranjan Pai (CEO and managing director of the Manipal Group). Over the last year, Alpha Capital has invested in InCred Finance and Food Link Services Pvt. Ltd.

SME Lending
CredAble joins a growing number of startups in the online lending segment, many of whom are targeting SMEs, that have raised funds.

Last month, Hyderabad-based fintech startup CredRight raised $1.3 million (Rs 9 crore) in a pre-Series A round of funding from seed-stage impact investment firm Accion Venture Lab, early-stage investor YourNest Venture Capital and other angels. The startup offers collateral-free business loans to micro, small, and medium enterprises (MSMEs) on the back of expected chit fund receivables.

In the same month, emerging markets private equity firm Actis Advisors said it will invest up to $220 million (Rs 1,484 crore) over five years in an NBFC founded last year by KV Srinivasan, the former CEO of Reliance Commercial Finance. The lender, Actis said, would focus on loans against collateral to small and medium enterprises (SMEs) operating in a dozen sub-sectors.

In April, e-commerce major Amazon India invested $22 million(Rs 144 crore) in Bengaluru-based digital SME lender Capital Float. The company operates a hybrid marketplace where banks and NBFCs co-lend along with the firm to borrowers.

Namaste Credit, Lendingkart, FlexiLoans, Shubh Loans, KNAB Finance and Stashfin are among the other digital lenders that have raised funding over the past year.