Drip Capital crosses $1 billion milestone in trade financing for small businesses

Y Combinator-backed small and medium enterprise (SME) focused trade finance company Drip Capital has crossed the $1-billion milestone in cross-border trade receivables financing transactions through its platform.

Founded in 2015, Drip Capital provides post-shipment finance on the value of the exporter’s invoice at the time of bill of lading is issued. Bill of lading is a document detailing the type, quantity, and destination of the goods being carried. The exporter is required to pay a one-time processing fee, a factoring fee charged for each invoice, and interest ranging between 4.5 per cent and 9 per cent per year.

“As India relaxed its lockdowns after which demand started returning from consumer-oriented economies such as Europe and the US, MSMEs need for working capital has increased. This further underscored the need for alternative financing solutions like the ones Drip Capital provides.

The company has recorded a 50 per cent quarter-on-quarter growth in the last three quarters,” Pushkar Mukewar, co-Founder and CEO, Drip Capital said.

Unlike traditional financial institutions, Drip Capital claimed to leverage data analytics and technology to underwrite credit. It is working with more than 1,500 sellers and buyers globally and over 700 exporters across 60 cities in India, according to the company.

Drip has so far secured close to $200 million in equity and debt since 2016. It counts Accel Partners, Sequoia Capital, Wing VC among its investors apart from Y Combinator.