Progcap will deploy these funds to enhance its services and expand the brand’s presence across existing geographies
Progcap claims it has scaled to 300k retailers across 50 corporates and disbursed over INR 1500 Cr of loans for India’s multi-tiered supply chains
The company is aiming to impact over 5 Mn enterprises by the end of 2023
Corporate retail financing startup Progcap has raised $25 Mn equity capital as part of its Series B investment round led by Tiger Global and existing investor, Sequoia Capital India.
The company will deploy these funds to enhance its services and expand the brand’s presence across existing geographies. The firm will also use the capital to scale up the team, strengthen the technology differentiation and diversify into new product offerings to fortify its vision of building a full stack digital platform for last mile retailers.
Founded by Pallavi Shrivastava and Himanshu Chandra, Progcap claims it has scaled to 300k retailers across 50 corporates and disbursed over INR 1500 Cr of loans for India’s multi-tiered supply chains. Working at the intersection of software and financial services, Progcap aims to be the first full stack retailer focused digital bank which enables capital flow across the supply chain to underserved retailers. The company is aiming to impact over 5 Mn enterprises by the end of 2023.
“Progcap has built a unique product to cater to the working capital needs of small Indian retailers who serve much of India’s $800 Bn retail market. As supply chains in India get formalized with GST, the company will play an important role in serving the financial needs of such retailers. Since Sequoia Capital India’s Series A investment, Progcap has scaled the business with exceptional credit quality and high capital efficiency, the team is excited to strengthen the partnership with this financing,” said Ashish Agrawal, principal, Sequoia India.
Scott Shleifer, Partner, Tiger Global said, “We are thrilled to partner with the Progcap team as they help small and mid-size businesses get access to financing. We believe Progcap has an exciting path ahead as they continue to innovate in this underserved market.”
Commenting on the fundraise, the founders said, “We are excited to have Sequoia Capital India double down on Progcap and thrilled to have Tiger Global join us in our journey. The continued faith that our customers, partners and investors have put in us is a testament to our teams’ unrelenting efforts. We are committed to continue our efforts in building India’s largest digital banking platform for last mile retailers.”
The company is backed by Tiger Global, Sequoia Capital India, GrowX, Axis Capital and other well-known investors. It had previously raised $1.4 Mn debt financing from Stride Ventures in February 2021. In 2019, it had raised $5 Mn Series A funding from Sequoia Capital.
India is home to approximately 1,263 digital lending startups, out of which over 147 (12% of the total 1,263) are backed by venture capital funding, according to Inc42 Plus analysis. With venture capital inflow in B2B lending startups growing at a CAGR (2015-2019) of 72%, it remains the most favoured sub-segment within the lending tech segment. But the lending sector is among the first to take a hit when lockdowns strike.
According to a report by Redseer, loan disbursals for all the key players had taken a hit by almost 90% in value terms between March-April 2020 in the immediate aftermath of the lockdown, with MSMEs being the worst impacted borrowers. According to industry stakeholders and experts that Inc42 spoke to, the nature of the impact will be similar during the second wave, although it is expected to be milder given the staggering nature of lockdown so far.