Accel and Sequoia-backed fintech player Drip Capital has secured a $40 million (about Rs 290 crore) warehouse credit line from the California-based East-West Bank to expand its trade finance solutions to small businesses.
Founded by Indians, the California-based Drip Capital deals with cross-border trade finance. India is its largest market, followed by the US where it mostly deals with buyer finance, and Mexico.
The partnership with East-West Bank represents a significant milestone for us and will further accelerate our ability to provide fast and seamless financing to global exporters and importers, Pushkar Mukewar, Co-founder and Chief Executive Officer of Drip Capital, told PTI.
As much as 50 percent of the credit line will be deployed in India, he added.
The credit line is an asset-based facility and increases Drip Capital’s financing capacity to help power the next phase of growth.
Drip Capital offers trade financing solutions in the US and developing markets like India and Mexico by giving their clients access to working capital quickly.
It works with over 1,500 sellers and buyers spread across over 80 countries and has so far financed over $1.2 billion of international trade since its inception in 2016, Mukewar said.
In the US, Drip provides mostly buyer finance such as supply chain and inventory finance, to small importers while in India and Mexico it gives seller finance. It lends collateral-free and is fully digital.
Drip has raised nearly $200 million through venture capital and debt since 2016, including over $45 million in equity through investors like Accel Partners, Sequoia Capital, Wing VC, and Y Combinator.
While Drip began with India four years ago, it entered Mexico in 2019, and is also services exporters in Ecuador, Bangladesh, and the UAE.
Mukewar said Drip prices almost one percent of the financed amount depending on the ticket size, which averages around $40,000 duration and nature.
East-West Bank is traded on Nasdaq with total assets of over $50 billion. It gives commercial and consumer banking services across key US and Chinese cities.
Mukewar said his clients include commodities exporters who are into spices, ready-mades, and industrial goods.
Of its total loan book, 80 percent is seller finance and 20 percent is buyer finance, he added.