Google has invested in Progcap, an Indian startup that provides working capital to small and medium-sized businesses, the companies announced Tuesday, making another move in a category that has caught the attention of Facebook and Amazon in recent years.
The investment is part of new $40 million in funding that Progcap has raised, he said. Creation Investments and Tiger Global led the startup’s five-year Series C funding 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 expands the startup’s Series C, the first tranche of which closed in September, to $70 million. With the new funding, the Delhi-based startup’s all-time raise topped $100 million.
Progcap serves over 700,000 small retailers, which dot hundreds of Indian cities. The startup is extending a $10,000 to $12,500 revolving line of credit to retailers, providing them with much-needed capital to purchase new inventory and grow their businesses.
As we have written before, a significant number of retailers in India are struggling to access working capital. “The gap in the working capital financing market is around 98%,” Pallavi Shrivastava, co-founder of the startup, said in an interview with TechCrunch. “The market is completely disorganized and insufficiently addressed.”
The startup, which uses its own underwriting technology and access to retailers’ finances to determine their creditworthiness, also provides retailers with tools to check their account statement, invoices, make online payments and track disbursements.
Progcap aims to become “a complete retailer-focused digital bank that digitizes, automates and facilitates the movement of capital across the supply chain,” she said.
Progcap says it has disbursed around $1 billion to retailers over the past four years, which operate across a wide range of industries, a figure it is currently on track to disburse this year. Retailers served by Progcap have an annual cash flow of around $125,000, the startup said.
“We are delighted that our existing investors have continued to deepen their conviction in Progcap and delighted that Google has joined us in this adventure,” said Shrivastava and Himanshu Chandra, the other co-founder of Progcap.
“Progcap becomes the core operating engine for all of its clients’ transactions, 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 company 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 get loans.
The social giant is working with CDC Group-backed Indifi to provide small loans – ranging from 500,000 Indian rupees ($6,720) to 50,000,000 ($67,200) – at a predefined interest rate of 17% at 20% per year and will not. requiring companies to provide guarantees or membership fees, he told TechCrunch.
“We are delighted to invest again in the Progcap team as they expand their product offering and further serve last mile retailers in India,” Creation Investments partner Tyler Day said in a statement.