New Delhi, June 22 (KNN) India and California based SME lending startup Drip Capital has raised $15 Mn of an equity funding round from Accel, Sequoia India and Wing VC investors.

In this latest funding round, existing investors along with Y-Combinator who had earlier invested $5M also participated.

Drip Capital has also raised an undisclosed amount of debt capital from Silicon Valley Bank and other banks.

The startup intends to use the raised funds to scale up operations in India and for modifying models in other geographical areas.

Commenting on the recent development, Mohit Bhatnagar, Managing Director, Sequoia Capital India Advisors, said, “With a partner like Drip Capital, emerging market exporters now never say ‘no’ to a new order due to working capital constraints. This offers a huge boost to small and medium businesses which play such a significant role in India’s trade network.”

Founded in 2014, Drip Capital started with India as the first exporter market. It works towards providing working capital finance to emerging small and medium-size enterprises (SMEs) that are indulged in the cross-border trade.

It aims to create a lending platform for the existing SMEs and accelerate global trade. It employs alternative data and technology to underwire and finance cross-border transactions.

The company claims to have already funded over $100M of trade flows across industries in the last 18 months.

With a slowdown in bank lending and delays in GST input tax credit, Pushkar Mukewar, Co-Founder and Co-CEO of Drip, believes that Drip has entered the Indian market for exporters at a right time when large number of MSMEs are facing problems of working capital crunch.

Reviewing the Indian loan market situation and PSUs stricter norms in facilitating financial support to MSMEs, he said that the working capital gap in India is quite large.

Where SMEs contribute to 40% of exports, however, experience 50% rejection rates from banks for trade finance, he added.

“Our assessment is based on trade performance rather than asset value which allow us to effectively service SME exporters,” Neil Kothari, Co-Founder and Co-CEO of Drip added.

Drip Capital had also funded an agro-commodity exporter from Andhra Pradesh by providing collateral-free facility to the exporter.