[Funding alert] Fintech startup Capital Float raises $50M from Lightrock India

Fintech major Capital Float on Tuesday said it has raised $50 million in an equity funding round led by Lightrock India.

New investors such as David Velez, Founder of Nubank, Latin America's largest fintech firm; Cred founder Kunal Shah; and Amrish Rau, CEO of Pine Labs, also invested in the startup's latest round.

Capital Float said it will use the funds to scale its BNPL platform, and expand its partner ecosystem.

"By solving for affordability as well as convenience, in a fully-regulated format, we believe that our BNPL approach can responsibly expand access to credit to over 100 million customers who are starting to transact online," said Capital Float's co-founders Sashank Rishyasringa and Gaurav Hinduja in a press release.

The startup's existing investors Sequoia Capital India, Ribbit Capital, Creation Investments Capital Management, and Dinesh Hinduja family office also participated in the latest round.

Capital Float has been pushing into BNPL quite aggressively over the past couple of years, making a bigger play for the consumer lending pie. The startup has 2.5 million customers using its platform, powering over Rs 2,000 crore-worth online purchases on an annual basis.

It has partnered with platforms including Amazon, MakeMyTrip, Unacademy, and boAt Lifestyle to help buyers checkout using the BNPL option.

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"We are now financing two million purchases every month across 14,000 pin codes, while maintaining NPAs below 1.5 percent," the co-founders said.

In June this year, Capital Float raised Rs 50 crore in debt funding from The Netherlands-based Triodos, which invested in the company via its two financial inclusion funds, Triodos Microfinance Fund and Triodos Fair Share Fund.

It has raised over Rs 200 crore in debt since January 2021.

“Capital Float has solved the unique triumvirate of customer experience, risk management, and merchant partnerships that lies at the heart of unlocking the BNPL opportunity in India," said Saleem Asaria, Partner at Lightrock India.

"In addition to its strong technology platform, it has built a sophisticated underwriting and collections capability, along with an ethical lending playbook, that makes the model very compelling," he added.

Founded in 2013, Capital Float is the trade name for Capfloat Financial Services Private Limited (formerly known as Zen Lefin Private Limited), a non-banking finance company (NBFC) registered with the Reserve Bank of India.

It has raised over $110 million in equity funding from marquee investors such as SAIF Partners, Sequoia India, Aspada Investments, Creation Investments Capital Management LLC, Ribbit Capital, and Amazon.

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