The IFC (International Finance Corporation), the private investment arm of the World Bank, has invested $10 million as equity in Gurugram-based Power2SME, a B2B online buying club for small and medium enterprises, which helps them to buy raw materials at bulk prices.
Following the investment, IFC will also advise Power2SME to help it expand beyond its presence in 14 states, improve its ability to provide working capital to SMEs by adding more banks as partners, and increase the number of users on its platforms by up to 10 times in five years.
Backed by Nandan Nilekani’s family office apart from institutional investors such as Accel Partners, Inventus Capital Partners and Kalaari Capital, the company has so far raised nearly Rs 233 crore since its inception in 2012.
“IFC’s extensive experience in supporting the SME sector through financing and deep networks with banks and financial institutions will help us in our vision to make SMEs bankable,” said R Narayan, CEO, Power2SME.
Own and operated by BEBB India Pvt Ltd, Power2SME works with large, established suppliers and vendors such as SAIL, TATA Steel, ESSAR Steel, Allied Strips, JSW, Rathi Steel, Victor Exim, Balaji Enterprise, POSCO Steel, Apollo Pipes, JSL, etc.
It also works with nearly 50,000 small and medium industries sourcing raw materials such as steel, polymers and chemicals, and provides a buying club for SMEs ordering from a common location to procure bulk raw materials directly from these renowned companies.
Power2SMe currently has a presence across 16 cities, and the number of transacting SMEs is expected to grow more than 10 times by 2021, while the investors aim to improve access to finance for over one million SMEs in the next five years.
In January 2016, Power2SME had raised an undisclosed amount of funding led by Infosys co-founder Nandan Nilekani with participations from existing investors.
Earlier, the firm had raised Rs 42 crore from early-stage venture capital fund Accel Partners, Kalaari Capital and Inventus Capital in 2014, and secured its Series B round of funding of $6 million in April 2013 from existing investors.