FB Pixel no scriptTiger Global and Sequoia India lead USD 25 million round in lending startup Progcap | KrASIA

Tiger Global and Sequoia India lead USD 25 million round in lending startup Progcap

Written by Avanish Tiwary Published on   2 mins read

Progcap competes with SoftBank and Alibaba-backed Paytm, Walmart-owned PhonePe, and Coatue Management-backed BharatPe.

Delhi-based financial technology startup Progcap, which lends money to small and medium enterprises (SMEs), said it has raised USD 25 million in its Series B round led by Tiger Global and existing investor Sequoia Capital India. This investment round comes less than six months after the company raised a debt fund of USD 1.37 million from Stride Ventures.

The company will utilize the latest investment to scale up the team, strengthen its technology, expand brand presence across existing geographies, and introduce new offerings.

Founded by Pallavi Shrivastava and Himanshu Chandra, Progcap offers working capital to small and medium retailers in semi-urban and rural areas. It claims to have disbursed over INR 1,500 crore (USD 200 million) to 300,000 retailers. By the end of 2023, it aims to have more than 5 million enterprises using its platform for their lending needs.

“Progcap has built a unique product to cater to the working capital needs of small Indian retailers who serve much of India’s USD 800 billion retail market. As supply chains in India get formalized with GST [Gross Sales Tax], the company will play an important role in serving the financial needs of such retailers,” said Ashish Agrawal, principal of Sequoia India.

With the rise in the adoption of digital services, SMEs in India are quickly adopting digital tools and taking orders online. To this effect, they require additional funds to ramp up their stocks and supply chain.

It is difficult for small retailers to get working capital from banks as many SMEs don’t have a formal credit history for banks to ascertain their borrowing capabilities. Moreover, the paperwork takes a lot of time, a process that lending companies like Progcap have digitized. The company relies on retailers’ day-to-day business, their existing supply chain, and other such parameters to ascertain creditworthiness.

Progcap competes with the likes of SoftBank and Alibaba-backed Paytm, Walmart-owned payment platform PhonePe, and Coatue Management-backed payment solutions firm BharatPe.

With this investment, Tiger Global, which has accelerated its investment in India beginning this year, bought equity in Sequoia Capital’s ten portfolio companies this year. These include cryptocurrency exchange CoinSwitch Kuber, direct-to-customer startup Plum, fintech companies Groww and Cred, and B2B startups Moglix and Innovaccer, among others.


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