PALO ALTO, Calif., Jan. 14, 2021 /PRNewswire/ — Drip Capital has reached a major company milestone; financing over US$ 1B of cross-border trade through its platform. The global fintech company provides working capital solutions to small and medium-sized importers (SMBs) in the United States and exporters in emerging markets like India and Mexico.
Sharing his views on the company’s milestone, Pushkar Mukewar, Co-Founder and CEO, Drip Capital said, “Our core focus has been to innovate and solve credit access problems for the export-import community. With the company crossing the US$ 1B mark, we are confident about taking the business to new markets and continuing to bridge the trade finance gap for SMBs globally.”
Drip has been providing SMBs with working capital solutions since launching in 2016 and has continued supporting them through the COVID-19 pandemic. While the pandemic disrupted supply chains globally and caused traditional capital providers to stop lending, the demand for imports did not decline, rather it simply changed in composition. Meanwhile, many SMBs remain cash-starved and need working capital to service this spike in demand, further underscoring the need for alternative financing solutions like the ones Drip Capital provides.
“Since our financing products are short term in nature, around 30-50 days, we have performed well during COVID. As economies have opened up, we have seen a significant increase in demand for our financing products. We have witnessed over 50% quarter on quarter growth in the last three quarters,” adds Mukewar.
Unlike traditional financial institutions, Drip Capital leverages data analytics and technology as the basis for its underwriting engine, allowing it to scale rapidly and provide a seamless and simple experience for SMBs. Currently, it is working with over 1,500 sellers and buyers throughout the world. In the US, it offers inventory finance and supply chain finance solutions to importers and traders, who further cater to multinationals across the country.
Drip has raised nearly US$ 200M through venture capital and debt since 2016. On the equity front, the company has raised over US$ 45M through investors such as Accel Partners, Sequoia Capital, Wing VC, and Y Combinator.
Drip has also partnered with institutional investors, family offices, and wealth advisors to provide investors short-term (3 Months to 1 Year) Notes backed by a diversified pool of trade finance assets. Investors seeking uncorrelated returns in the mid to high single digits find Drip’s Notes attractive in a low yield and volatile environment.
Speaking to the company’s financials, Karl Boog, Head of Capital Markets at Drip Capital said, “Our platform gives qualified investors unprecedented access to trade finance assets. The continuous infusion of debt capital has helped Drip finance receivables from its diversified pool of exporters in India and Mexico with buyers mostly in North America and Europe. While the majority of Drip’s debt investors are based in the United States, the company has added global clients and is seeing significant interest from European and Asian investors too, where attractive, stable yields are hard to come by. Moreover, impact minded investors see trade finance assets as a way to support thousands of SMBs involved in cross border trade and indirectly drive significant job growth across supply chains.”
Trade receivables are short-term assets that are an alternative source of income. Their performance is uncorrelated with traditional asset classes such as equities, fixed income, or even real estate. To date, Drip has issued US$ 150M in Notes. The company has reported zero principal losses and has made US$ 6M in monthly interest payments to its debt investors since inception.
About Drip Capital
Drip Capital is a global financial technology company backed by Accel, Sequoia, Wing VC, and Y-Combinator. Drip offers unique and innovative trade financing solutions to solve working capital problems among small and medium-sized businesses in emerging markets like India and Mexico and developed markets like the US. The financing solutions are collateral-free and offered through a completely digital process. To apply for Drip’s offering, customers need to complete a quick online application with minimal paperwork. The company uses electronic data and an automated risk assessment platform, thereby ensuring a quick turnaround. Drip Capital was recently honored as a CB Insight’s Top 250 Global Fintech Companies in 2020. Read more about the company here: www.dripcapital.com
SOURCE Drip Capital