Sequoia-backed FinTech firm Drip Capital secured a $40m warehouse credit line from California-based East-West Bank to expand its trade finance solutions to small businesses.
The partnership will enable the firm to provide fast and seamless financing to global exporters and importers. The credit line is an asset-based facility and helps boost Drip Capital’s financing capacity for the next phase of growth.
The FinTech firm which focuses on providing trade finance to exporters and importers, has raised nearly $200m through venture capital and debt since 2016 as well as $45m in equity through investors including Accel Partners, Sequoia Capital, Wing VC and Y Combinator to date.
Drip Capital offers trade financing solutions in the US and developing markets like India and Mexico by allowing clients to access working capital easily. Its collateral-free platform provides buyer finance such as supply chain and inventory finance to small importers in the US to enable them to manage their cash flows.
Having financed over $1.2bn worth of international trade since its inception in 2016, it currently works with over 1,500 sellers and buyers spread across over 80 countries and plans to increase its partnerships.
Commenting on the funding round, co-founder and CEO of Drip Capital Pushkar Mukewar said, “Post this funding, we expect to reach 700-1000 SMEs over the next 1-2 years and increase our customer base from India by 50%.” He added that the average ticket size for each loan for SMEs is $25-30,000 for 40-45 days.
“In the past, we have engaged with a lot of family offices and funds but getting a strong bank partner is also an important milestone for the company. It helps to prove to the investor community that banks are interested in this asset and are wanting to finance these assets,” Mukewar added.
While Drip began with India four years ago, it entered Mexico in 2019 after which it started services for exporters in Ecuador, Bangladesh and the UAE.
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