CapFloat Financial Services, the company that owns the fintech startup Capital Float is set to receive a funding to the extent of $100 to $150 million and the funds could come from global payments major, Netherlands based PayU. Reports suggest the talks are at an advanced stage and may be concluded soon. Capital Float has plans to expand its lending business and the funds could be deployed in that as and when the invest materialises.
Sharing further details, the sources giving this information, claim PayU is actually interested in taking a sizeable 25% stake or even more in the Indian startup. With a valuation of $500 million, the amount indicated as being invested matches with this ratio. But this remains to be confirmed. PayU already has made an investment of $130 million in another Indian fintech startup CitrusPay.
It is further learnt that the Netherlands based company is not only keen on making more such investments in this segment in India, but even set up its own NBFC here for which it has already received a licence from RBI. PayUâ€™s parent Naspers already has made widespread investments in Indian startups.
Coming back to Capital Float, the company has emerged as a leading lender in the business loans segment, extending short term loans of up to 12 months duration and the ticket amounts can vary from Rs 1 lakh to Rs 1 crore. Now, the company wants to expand to the consumer lending business as well.
Capital Float has not had any difficulty in raising funds in the past as well. Sequoia India, SAIF Partners, Aspada Investments, Creation Investments Capital Management, and Ribbit Capital are all existing investors in the company apart from an investment of Rs 144 crore from Amazon.
On the financial performance front, the situation with Capital Float is no different from most other startups in any segment; increasing revenue but mounting losses as well. But the sector it is trying to target, the MSMEs are definitely seen as the best to be considered for borrowing from such fintech startups and from that perspective, the future does look bright.