Capital Float raises $50 Mn to scale its BNPL platform

Digital lending company Capital Float has scooped up $50 million in its Series D round led by Lightrock India in participation with existing investors Sequoia Capital India, Ribbit Capital, and Creation Investments. 

Angel investors such as David Vélez, Kunal Shah and Amrish Rau also participated in the new round. Capital Float will utilise the fresh proceeds to scale its buy now pay later platform (BNPL) and expand its partner ecosystem, said the company in a press statement.

Founded by Sashank Rishyasringa and Gaurav Hinduja, the Bengaluru-based company is a digital finance company that provides credit to salaried and self-employed individuals in India.

Capital Float has partnered with leading platforms such as Amazon, MakeMyTrip, Unacademy, and boAt to offer short-term credit to finance individual’s purchases across e-commerce, D2C brands, travel, edtech and healthcare. It recently partnered with Razorpay to enable credit access to over 100,000 merchants on the digital payment gateway major.

It’s worth noting that Amazon had put $22 million in the Bengaluru-based company’s extended Series C round worth $45 million in April 2018. 

Capital Float claims that it has 2.5 million customers using its platform, powering over Rs 2,000 crore-worth online purchases on an annual basis while maintaining NPAs below 1.5%.

It also operates Walnut, a personal finance app that the eight-year-old company had acquired for $30 million in 2018. Walnut provides expense tracking, budgeting and bill reminder features and provides instant small-ticket loans.

BNPL has emerged as a strong business proposition for fintech companies in India and globally. Affirm, PayPal and Square (via AfterPay) and Stockholm-based Klarna have been cashing on the massive growth from BNPL business during and aftermath of the pandemic. To beef up its play in the segment, PayPal had recently acquired Japanese BNPL major Paidy.

On similar lines, the BNPL model has caught momentum in India and investors are rallying up to fund them. ZestMoney recently kicked off its  Series C round with $50 million from Australian BNPL firm Zip Co Limited and others.

Capital Float competes with a slew of companies such as ZestMoney, EarlySalary, MobiKwik, KreditBee, Bullet Money, PayU-owned LazyPay, Slice among others. MoneyTap also forayed into the BNPL segment in February this year.