The international investment company Raison Asset Management has enlarged the portfolio of its Element GTPP fund with a fintech company Drip Capital. The investment took place in the VC secondary market, the amount is not disclosed. Drip has previously raised $375 million in funding from Y Combinator, Accel Capital, Sequoia Capital India, Silicon Valley Bank, Barclays, and more.
Drip Capital developed a risk assessment platform to offer collateral-free loans on working capital for importers and exporters in the USA, India, Mexico, and other countries. The startup is targeting underserved SMEs that seek working capital to scale international trade.
The Asian Development Bank estimates that the global trade finance gap was $1.7 trillion in 2020. At the same time, from 40% to 50% of SMEs in developing countries do not receive loans from banks. The trade finance gap in India for SMEs reaches $70-$80 billion.
Since 2015, Drip has funded $2.2+ billion in trade transactions reaching recipients in 100+ countries. The company has over 3,500 clients and has two main offices in San Francisco (USA) and Mumbai (India).
Now the company is preparing for pilot projects in Colombia and Peru. In addition to geographic expansion, Drip is betting on launching new products and increasing the average loan value of current customers. The company, according to CEO Pushkar Mukevar, intends to become a “one-stop partner” for SMEs in international trade.
Drip Capital will offer clients a range of services: renting space in logistics centres (for the construction of which the company recently received a $135 million credit), currency risk hedging services, and insurance against non-payment under contracts.,
In the next 2 to 3 years, the company plans to fund transactions worth $10 billion. In Mexico, the volume of processed Drip payments increased by 400% in 2021, and the company expects to see at least the same figures this year.