Fundfina, a B2B2B embedded financing platform for Enterprises and MSMEs, today announced that it has raised $ 1.3 Million (INR 10 Crores) as part of its seed round. The round saw participation from LetsVenture AIF Syndicate led by Pratekk Agarwaal , Prolific Investor and Ex-CBO- BharatPe, Telama Investment, NAFA Capital, BSE listed NBFC, Hem Angels and follow-on from all of existing Angels and impact investors.
The company had earlier raised $0.3m (INR 2 Crores) in Jan 2020 that saw participation from MDs and senior executives of banks, asset management firms and technology firm such as Sanjay Agarwal – Founder of Athena Capital, Birendra Agarwal – CIO Close Brothers (FTSE 250 Merchant Bank), Bhavin Zaveri – Director TCS, Rajesh Chaubey – Senior Engineer Saipem, Abhishek Yadav – Director Tata Power, and grants from impact investors such Inclusive50 (IFC & WorldBank), Bharat Inclusion Initiatives (CIIE by IIMA) and United Nations Development Programme.Fundfina was also recognised as Top 50 Fintech worldwide for Financial Inclusion from IFC & Worldbank and with grants from Bharat Inclusion Initiative (IIMA-CIIE) and UNDP.
Fundfina, founded by Rahul Tripathy, Nishant Bhaskar, Bikram Bajaj & Abhijit Naik, in 2019 empowers small businesses to grow, manage and protect cash-flows. The company enables brands & institutions to grow and retain their distribution network over an open and trusted embedded financial marketplace. Proceedings of the current round would be used for accelerating Fundfina’s vision of building the best open marketplace bank for institutions to serve MSME financing needs. This will be done by scaling up the marketplace participants and throughput of the key products of patent-pending financial inclusion indices and unsecured working capital, while introducing new products such as B2B checkout, MSME credit cards, small business insurance and micro-savings. In addition to accelerating the business sales and operations, the funds will be used in equal proportion for technology & analytics, acquisitions costs for supplies of monies and also on compliance infrastructure.
Currently Fundifina has about 600,000 micro and small businesses across 26 Indian states with 80% being new to formal credit. Along with this, the company also counts big marquee clients such as Unity, ICICI, LivFin, Aphelion, IndiTrade, Emerald and 30+ brands & digital enterprises such as Eko, Pay1, Masterpay, MyDukaan, SmartDukaan to name a few. Using TrueScore™, the company has achieved widening the financial inclusion network for retailers who do not have a credit bureau footprint. The company aims to generate TrueScore for millions of retailers & merchants and to distribute credit in excess of ₹100+Crores on a monthly basis in the next 9-12 months.
Commenting on the fundraise,Pratekk Agarwaal,Lead Investor and Ex-CBO BharatPe: “FundFina has the potential to become No 1 go to national brand for MSME cash-flow based lending ( Embedded Financing ) on back of tremendous momentum and several top worldwide fintech awards over the last 18 months with their proprietary MSME focused underwriting models and the founding team that have built banks and platforms, huge underserved opportunities in India & other emerging markets and robust data & platform play through IP in indices and technology”.
Tejas Subramanian from Telama Investment commented: “Cash flow based lending is to be the basis of the next phase of credit adoption. The team has the inherent capability to develop products that integrate( and potentially transform) with the ecosystem with key tech moats. It is the start of an exciting journey in a very large addressable market”.
Rahul Tripathy, co-founder and chief executive of the startup, commented “Democratizing finance for small businesses is the raison d’être for Fundfina. Our B2B2B working capital solutions powers a huge retailer base of leading payment firms, banking correspondents and kiranatech while providing our lending partners indices driven approach to investing in MSME credit portfolio. With the recent round of funding we will accelerate scaling of our API first open financing platform”.
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With Nano and Micro businesses constituting 90% of MSMEs in India and other emerging markets, there is now an increasing realization that a single nano and micro merchants in India can operate more than one business from the same premises. Providing contextual financing through embedding of relevant financing options within B2B space is an increasing norm of the day – a phenomenon that has spilled over from the B2C segment and enabled by API friendly marketplaces.
