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Amazon-backed buy now, pay later platform Capital Float raises $50 million – TechCrunch

Capital Float, Amazon-backed startup Buy now, pay later service India’s many popular online platforms, including e-commerce companies, said Tuesday that they have raised $ 50 million in a new funding round, following strong growth in the last quarter.

Lightrock India led a Series D funding round for Bangalore-based startups. This has raised more than $ 200 million in funding for the seven-year-old company (more than half of which is debt). Existing investors Sequoia Capital India, Ribbit Capital and Creation Investments, as well as renowned entrepreneurs David Vélez of Nubank, Kunal Shah of CRED and Amrish Rau of Pine Labs have joined the new round.

Capital Float reaches its customers through partnerships with other companies. It is a lending partner for many popular online platforms, including Amazon India, online learning service Unacademy, airline Spicejet, direct-to-consumer lifestyle and electronics brand Boat and travel booking company MakeMyTrip. In an interview with TechCrunch, startup co-founder Sashank Rishyasringa explained that customers can buy with a loan at checkout.

The startup has also partnered with payments firm Razorpay to reach small businesses and partnered with Walnut to provide personal finance to its customers.

Capital Float has more than 2.5 million customers. According to the startup, these customers, who make more than 2 million purchases a month, use the service to raise more than $ 271 million annually. According to Rishyasringa, most of the startup focus over the past year has been in online space.

“Our customer base has more than quadrupled in the last 12 months and our collection efficiency was still over 95% during this period when many other companies were witnessing a decline,” he said. Told.

BNPL model of capital float. Image credit: Bernstein

The market to buy now and pay later is still in its infancy in India, where only a small part of the population has a credit card. However, a few start-ups, including Capital Float, ZestMoney and LazyPay, are beginning to show traction in the market.

Due to the low penetration of credit cards in India, few people in the country have a traditional credit score that banks rely heavily on establishing credit before issuing loans. In addition, small loans do not bring a favorable benefit to the bank, which reduces the incentive to write such a check.

According to Rishyasringa, half of Capital Float’s user base today doesn’t have a credit card. Capital Float, unlike many other online purchases, is a service that you pay later and is a fully regulated entity. This means that the company needs to report the user’s transactions to the credit bureau, which helps the user build a credit score profile.

Startups use different signals to take on each customer. He said the underwriting would take place “within two clicks and five seconds.”

“Capital Float has solved the unique triumvirate of customer experience, risk management, and merchant partnerships at the heart of unleashing BNPL opportunities in India. In addition to a powerful technology platform, ethical lending play Together with the book, we have built sophisticated underwriting and collection capabilities to make the model very attractive, “said Saleem Asaria, a partner at Lightlock India, in a statement.

“We have also been consistently impressed with the team’s tenacity and focus of execution throughout the complete credit cycle. Working with the team, through digital credit and financial products, millions of Indian customers We are pleased to be able to build a highly scalable, differentiated and sustainable business that has a positive impact on our lives. “

The new capital will help startups cope with the rapid growth seen in recent months, according to Richard Slinga. He attributed much of this growth to pandemics, but also noted that there are fundamental long-term changes in consumer behavior that helped startups make larger intrusions.

This is a developing story. read more…

Amazon-backed buy now, pay later platform Capital Float raises $50 million – TechCrunch Source link Amazon-backed buy now, pay later platform Capital Float raises $50 million – TechCrunch

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