Amazon-backed fintech ‘Capital Float’ scores $50Mn in latest fundraise

As the pandemic led to a hesitancy from using cash among the masses and depleted disposable incomes, people began exploring suitable alternatives. One such alternative is the Buy Now Pay Later (BNPL) segment, which has shot into prominence, as India’s fintech sector continues to grow at a ginormous pace. Amazon-backed Capital Float, one of the most popular BNPL startups in India, is getting in on the ride and has announced a fresh $50 million fundraise via some marquee investors.

The round was led by private equity firm Lightrock India and included participation from existing investors Sequoia Capital India, Ribbit Capital, and Creation Investments, as well as angel investors such as David Vélez, founder of Nubank, Kunal Shah, founder of Cred, and Amrish Rau, CEO of Pine Labs.

The proceeds from this round will be utilized towards the scaling up of its BNPL platform and expanding its partner ecosystem. The seven-year-old startup has already partnered with names such as Amazon, MakeMyTrip, Unacademy, Spicejet, and boAt Lifestyle and claims to have financed nearly two million purchases monthly across 14,000 pin codes, while maintaining NPAs below 1.5%.

The startup has come a long way and with over 2.5 million customers, has emerged to be one of the biggest players in the BNPL segment. Even though this sector remains in its nascent stage in India, recent efforts by BNPL firms across the country are bringing it to the mainstream. In fact, the BNPL segment in India has grown to around $1.5-2 billion in less than 18 months since the pandemic wreaked havoc across the globe.

Capital Float offers BNPL credit when the customers proceed to checkout (and they can make the purchases via a loan) and has partnered with Razorpay to expand BNPL to over 100,000 merchants across the country. The startup ventured into this segment three years ago, and with the pandemic accelerating the push to go digital, has grown steadily. “Our customer base has more than quadrupled in the last 12 months, and our collection efficiency was still more than 95% during this period when many other firms were witnessing a drop,” Sashank Rishyasringa, co-founder of Capital Float, said.

“By solving for affordability as well as convenience, in a fully-regulated format, we believe that our BNPL approach can responsibly expand access to credit to over 100 million customers who are starting to transact online,” co-founders Rishyasringa and Gaurav Hinduja said in a press release.

“Capital Float has solved the unique triumvirate of customer experience, risk management, and merchant partnerships that lies at the heart of unlocking the BNPL opportunity in India. In addition to its strong technology platform, it has built a sophisticated underwriting and collections capability, along with an ethical lending playbook, that makes the model very compelling,” said Saleem Asaria, Partner at Lightrock India, in a statement.

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