Drip Capital Secures $113 Million in Funding to Boost Global Trade Finance

Drip Capital Secures $113M in New Funding to Accelerate Growth

PALO ALTO, Calif., Sept. 5, 2024 /PRNewswire/ -- Drip Capital, a leading digital platform for trade finance, has secured $113 million in new funding. This includes $23 million in equity from Japanese institutional investors, GMO Payment Gateway and Sumitomo Mitsui Banking Corporation (SMBC), and $90 million in debt financing, led by the International Finance Corporation (IFC) and East West Bank. Drip has seen remarkable growth, quadrupling its revenue and doubling its customer base in the past two years. The company has expanded its services for SMBs by integrating forex and risk analytics solutions with its core trade financing products. The new funding will expedite market expansion and support the development of new products tailored to customer needs. Drip has been a pioneer in the fintech domain, utilizing advanced AI technologies to enable efficient credit risk assessment, streamline operations, and enhance customer experiences. By continuing to invest in AI, Drip Capital aims to be at the forefront of implementing AI for trade finance. "In 2022 and 2023, the global trade sector faced significant challenges, including rising interest rates that squeezed margins and restricted capital access for SMBs. Despite these challenges, Drip has emerged as the preferred trade finance platform for SMBs in the US and India," stated Pushkar Mukewar, Co-founder and CEO of Drip Capital. "We've achieved cash profitability and expanded our business during this period. We are excited to welcome our new investors, and alongside our existing investors and debt partners, are ready to drive our next phase of growth." On the debt capital raise, Drip Capital's Chief Business Officer, Karl Boog, added: "Having financed over $6 billion in trade in the past eight years, we have successfully scaled our capital providers. We are thrilled to welcome additional capital from East West Bank and the IFC, the world's largest development finance institution." Karl Boog continued: "For our North American business, we have financed nearly $1 billion for US and Canadian SMBs over the past few years. Our unique Payable Finance offering allows our customers to pay their suppliers' invoices and extend payment terms up to 120 days." Drip's new investors and lenders have praised the company's impact and potential. "We are proud to have supported Drip from its inception, through both equity investment and debt financing. We greatly admire the remarkable growth they have achieved so far. It is a great honor for us to participate with an additional equity investment and advance towards a strategic partnership. Drip's innovative and comprehensive solutions in digital trade finance are transforming how SMBs engage in trade. We believe Drip's technology and proprietary underwriting are uniquely positioned to address the challenges in this space. We are excited to continue supporting their journey as they drive forward with ongoing growth and expansion," said Ryu Muramatsu, Executive Vice President, GMO Payment Gateway. "We are excited to contribute to the growth of society and market, by encouraging Japan-India corridor activities via this collaboration. We look forward to combining the expertise of SMBC Group with Drip Capital's technologies, to optimize global trade and enable opportunities for small and medium-sized businesses," commented Keiji Matsunaga, General Manager of Digital Strategy Department, Sumitomo Mitsui Banking Corporation (SMBC). About Drip Capital Drip Capital is a high-growth digital trade fintech focused on the $5 trillion global SME cross-border trade industry. The company collaborates with over 9,000 sellers and buyers across 100+ countries, having financed more than $6 billion in trade transactions. As a strategic financial partner, Drip Capital enables SMBs to effectively manage their cash flows and working capital, driving sustainable business growth. About GMO Payment Gateway As a leading company in Japan's payment industry, GMO Payment Gateway provides comprehensive online payment services, including in-person payment solutions, Buy Now Pay Later (BNPL), embedded finance, and Banking as a Service (BaaS). About SMBC Asia Rising Fund SMBC, one of the leading banks in Japan, co-funded SMBC Asia Rising Fund with Incubate Fund, which is a corporate venture capital, for the purpose of accelerating business development and partnerships through investments in high potential Asian start-ups. Photo: https://mma.prnewswire.com/media/2497481/Pushkar_Mukewar.jpg View original content to download multimedia:https://www.prnewswire.com/news-releases/drip-capital-secures-113m-in-new-funding-to-accelerate-growth-302239479.html SOURCE Drip Capital Market News and Data brought to you by Benzinga APIs

Drip Capital secures $113 million in new funding to accelerate growth

The company has expanded its services for SMBs by integrating forex and risk analytics solutions with its core trade financing products. Drip Capital, a digital platform for trade finance, has secured $113 million in new funding. This includes $23 million in equity from Japanese institutional investors GMO Payment Gateway and Sumitomo Mitsui Banking Corporation (SMBC) and $90 million in debt financing led by the International Finance Corporation (IFC) and East West Bank. The company has quadrupled its revenue and doubled its customer base in the past two years. It has expanded its services for SMBs by integrating forex and risk analytics solutions with its core trade financing products. While in forex, they have partnered with a leading bank to provide forex to SMEs, their credit risk solutions offer tools to SMBs to assess and mitigate the risk of non-payment by their customers. This helps to safeguard cash flow and allows them to extend credit terms to reliable customers. Pushkar Mukewar, Co-founder & CEO, Drip Capital says that the new funds raised will be invested in developing new financial products that cater to the evolving needs of customers. "Additionally, we will be strengthening our trade facilitation capabilities." Drip has been utilizing advanced AI technologies to enable efficient credit risk assessment, streamline operations, and enhance customer experiences. Mukewar says that trade finance is poised to be revolutionized by fintech, specifically for SMBs that are actively involved in import and export operations. "As digitization changes the way financial business is steered, fintech platforms will be a necessity in giving greater access to capital as well as enabling smoother transactions and reducing some of the red tape that comes with cross-border trading. Trade finance will be further bolstered by such innovations as real-time payment solutions, blockchain-based smart contracts, and AI-driven credit scoring -- to become a more efficient and inclusive industry," he elaborates. Speaking about the $3 trillion global trade finance gap that can be addressed through innovative, accessible financing solutions for SMBs, Mukewar says that traditional lending institutions severely limit access to SMBs due to the need for hard collaterals. "A lot of SMBs remain underserved and unserved, creating this gap. By leveraging digital platforms, we can democratize access to trade finance, offering SMBs faster, more flexible financing options that are unsecured and tailored to their needs," he states. The company aims to be a one-stop global trade financing and facilitation platform by offering products and services that make SMEs trade efficient. "We have already launched forex and raw material procurement support, beyond our core business of trade finance. Given the opportunity in India & the US, we have decided to focus on deepening our presence in these geographies. We do plan to go beyond these geographies in the longer run," Mukewar adds. Drip Capital collaborates with over 9,000 sellers and buyers across 100+ countries, having financed more than $6 billion in trade transactions. It enables SMBs to effectively manage their cash flows and working capital, driving sustainable business growth.

Drip Capital raises $113 million, including funding from Japanese investors

Drip Capital, a digital platform for trade finance, has secured $113 million in new funding. This includes $23 million in equity from Japanese institutional investors GMO Payment Gateway and Sumitomo Mitsui Banking Corporation (SMBC) and $90 million in debt financing led by the International Finance Corporation (IFC) and East West Bank. The new funding will expedite market expansion and support the development of new products tailored to customer needs. "In 2022 and 2023, the global trade sector faced significant challenges, including rising interest rates that squeezed margins and restricted capital access for SMBs. Despite these challenges, Drip has emerged as the preferred trade finance platform for SMBs in the US and India," said Pushkar Mukewar, Co-founder and CEO of Drip Capital. "We've achieved cash profitability and expanded our business during this period. We are excited to welcome our new investors and, alongside our existing investors and debt partners, are ready to drive our next phase of growth." Drip has in the past two years quadrupled its revenue and doubled its customer base. The company has expanded its services for Small and Medium Businesses (SMBs) by integrating forex and risk analytics solutions with its core trade financing products. Drip has been utilizing advanced AI technologies to enable efficient credit risk assessment, streamline operations, and enhance customer experiences. By continuing to invest in AI, Drip Capital aims to be at the forefront of implementing AI for trade finance. Ryu Muramatsu, Executive Vice President of GMO Payment Gateway, said," We are proud to have supported Drip from its inception through both equity investment and debt financing. We greatly admire their remarkable growth so far. It is a great honour for us to participate with an additional equity investment and advance towards a strategic partnership. Drip's innovative and comprehensive solutions in digital trade finance are transforming how SMBs engage in trade. We believe Drip's technology and proprietary underwriting are uniquely positioned to address the challenges in this space. We are excited to continue supporting their journey as they continue growing and expanding." Keiji Matsunaga, General Manager of the Digital Strategy Department at Sumitomo Mitsui Banking Corporation (SMBC), said," We are excited to contribute to the growth of society and the market by encouraging Japan-India corridor activities via this collaboration. We look forward to combining the expertise of SMBC Group with Drip Capital's technologies to optimize global trade and enable opportunities for small and medium-sized businesses." SHARE Copy linkEmailFacebookTwitterTelegramLinkedInWhatsAppRedditPublished on September 6, 2024

Drip Secures $113 Million to Grow Digital Trade Finance Platform | PYMNTS.com

Drip Capital has secured $113 million in new funding to develop new products and to accelerate the growth of its digital platform for trade finance. The company has quadrupled its revenue and doubled its customer base over the past two years, despite rising interest rates that challenged the global trade sector during that time, Drip Capital Co-founder and CEO Pushkar Mukewar said in a Thursday (Sept. 5) press release. "Despite these challenges, Drip has emerged as the preferred trade finance platform for SMBs [small- t0 medium-sized businesses] in the U.S. and India," Mukewar said. "We've achieved cash profitability and expanded our business during this period." With new investors joining the company's existing investors and debt partners, Drip Capital is "ready to drive our next phase of growth," Mukewar added. Drip Capital currently collaborates with more than 9,000 sellers and buyers in more than 100 countries, helping SMBs manage their cash flows and working capital, according to the release. In the past eight years, the company has financed over $6 billion in trade transactions. The company uses artificial intelligence (AI) to help assess credit risk, streamline operations and enhance customer experiences, the release said. It will continue to invest in that technology. Drip has also expanded the range of services it offers SMBs by integrating foreign exchange and risk analytics solutions with its core trade financing products, per the release. The company's investors include GMO Payment Gateway and Sumitomo Mitsui Banking Corp. (SMBC), according to the release. "Drip's innovative and comprehensive solutions in digital trade finance are transforming how SMBs engage in trade," GMO Payment Gateway Executive Vice President Ryu Muramatsu said in the release. Keiji Matsunaga, general manager of digital strategy department at SMBC, said in the release: "We are excited to contribute to the growth of society and market, by encouraging Japan-India corridor activities via this collaboration." Drip seized upon the increased digitization of trade-related data records by using technology and data to calibrate and price the risk involved in brokering cross-border transactions, Mukewar told PYMNTS CEO Karen Webster in an interview posted in 2021. "Another very important aspect of our product is looking not just at traditional financial metrics, but also leveraging electronic trade data to be able to really assess the risk of every transaction which we finance," Mukewar said.

Drip Capital, a fintech that provides working capital to SMBs, picks up $113M | TechCrunch

For over two decades, Jay Chandarana relied on commercial banks to meet the day-to-day, working capital needs of his family business, the sesame seed exporter Dhaval Agri. It was an arrangement that basically worked: the company grew to have a 13% share of the country's total exports, making it the largest sesame seed exporter in the market. Yet despite sending seeds to customers in 40 countries, it's still firmly a medium-sized enterprise, with last year's revenues clearing just $83 million. And it was facing a problem: when Chandarana thought about how he might expand the operation, his bank-based financial arrangement came up short. "Banking in India is collateral-based," Chandarana explained. "Your volumes may grow according to the business you're doing, but the bank payments will only increase according to the value of your collateral." So in 2019, Dhaval Agri decided to try arranging for working capital with Palo Alto-based startup Drip Capital as an alternative -- and it paid off. Chandarana told TechCrunch that Dhaval Agri's volume has increased 50% in the five years that he's been a customer of the startup. Now Drip is hoping to scale itself to meet that opportunity with more entrepreneurs in the country and beyond. It has raised $113 million in funding: $23 million in equity from Japanese institutional investors GMO Payment Gateway and Sumitomo Mitsui Banking Corporation; and $90 million in debt financing led by the World Bank's International Finance Corporation (IFC) and East West Bank. The company has raised about $640 million in equity and debt funding so far, with Accel, Peak XV Partners and Y Combinator among its other investors. The debt will be used to expand the number of working-capital loans it provides to SMBs, while the equity will be used for company and product expansion. It uses AI to automate and digitize processes and plans to also use it for risk analysis. Drip currently serves between 9,000 and 10,000 businesses, with around 60% coming from India and the rest from the U.S. and a small amount in Mexico. It is already profitable, and says it is aiming for 40% year-on-year growth in the next two years. The challenge that Dhaval Agri faced is not dissimilar to the capital hurdles that small and medium businesses face globally. SMBs work typically on very short capital turnarounds: they issue invoices to customers to make revenue, but these can take time to get paid and in the meantime these businesses need to pay suppliers themselves to continue operating. Working capital provided by third parties becomes a common solution. These are essentially short-term loans issued on credit that businesses repay when they themselves get paid (30, 60 and 90 days are common increments), while these businesses need to pay suppliers quickly to maintain sufficient inventory. In India, despite the large proportion of SMBs -- it's been described as the largest SMB market in the world, approaching 100 million enterprises -- traditional financial institutions have not leaned into working capital arrangements designed to encourage growth, just maintenance. Drip Capital addresses all this for thousands of small and medium importers and exporters like Dhaval Agri in India, as well as in the U.S. Its target customer generates annual revenue between $500,000 and $100 million. While it initially started with a focus on businesses doing exports out of India, it gradually expanded to include businesses focused on imports into India before expanding again to serve businesses in the U.S. As with other working-capital startups, Drip advances up to $2.5 million and will essentially buy up their customers' accounts receivable invoices to the same value (with a servicing commission on top). This allows businesses to have cash to pay their own suppliers and run their businesses, even when their customers take over two months to pay their invoices. Drip also provides account payable financing of up to $5 million aimed at help importers to extend the time they have to pay their suppliers. Drip Capital also recently started serving businesses in domestic trade in the U.S. and plans to expand that model in India. The startup has already applied for a non-banking financial company (NBFC) license to cover the domestic needs of Indian businesses. "The thought process is that for us to basically be able to holistic offering, it is important that we cover the domestic and cross-border needs of the companies we work with," said Pushkar Mukewar, co-founder and CEO of Drip Capital, in an interview. One of its new products is foreign exchange. Mukewar told TechCrunch that many of Drip Capital's clients either receive a foreign remittance or send foreign dollars out. The startup targets those clients by offering them cheaper foreign exchange access through its existing partnership with Barclays. Similarly, Drip Capital is piloting a sourcing platform to help connect buyers with new suppliers using its buyer-seller network. This latest investment comes nearly three years after Drip Capital raised $40 million in its Series C round in October 2021. "Given that we have achieved profitability, we raised only the amount of equity required for our next phase of growth while watching dilution," he said. He declined to disclose the valuation but confirmed it was not a down round. "The last two years have been really around making the economics of the business right to get to this point where we are profitable," he said.