Google has put money into Progcap, an Indian startup that helps small and medium-sized businesses get working capital, the two companies announced on Tuesday. This is Google’s latest move into an area that Facebook and Amazon have been interested in for the past few years.
It said that the investment is part of the $40 million in new money that Progcap has raised. The 5-year-old startup’s Series C funding round was led by Creation Investments and Tiger Global. Since September of last year, its value has nearly tripled to $600 million. Sequoia India and Southeast Asia, which were already investors, also took part in the round, Progcap said.
The new investment brings the start-total up’s funding to $70 million, which is its Series C. The first part of Series C was closed in September. With the new money, the Delhi-based start-up has now raised more than $100 million in total.
More than 700,000 small stores are served by Progcap. These stores are in hundreds of Indian cities and towns. The new company gives retailers a revolving credit line of $10,000 to $12,500. This gives them the money they need to buy new stock and grow their businesses.
As we’ve written before, a lot of retailers in India have trouble getting access to working capital. In an interview with TechCrunch, Pallavi Shrivastava, co-founder of the startup, said, “The gap in the working capital financing market is around 98%.” “The market is completely disorganized and not being taken care of well enough.”
The startup uses its underwriting technology and access to retailers’ finances to determine their creditworthiness. It also gives retailers tools to check their account statements and invoices, make online payments, and keep track of disbursements.
She said that Progcap wants to become “a full-stack digital bank focused on retailers that digitize, automate, and makes it easier for capital to move across the supply chain.”
Progcap says that over the past four years, it has given about $1 billion to retailers in a wide range of industries. It is on track to give out the same amount this year. The retailers that Progcap works with bring in about $125,000 in cash every year, the startup said.
Shrivastava and Himanshu Chandra, the other co-founder of Progcap, said, “We are thrilled that our existing investors have continued to believe in Progcap more, and we are thrilled that Google has joined us on this journey.”
“Progcap is becoming the main operating engine for all of the transactions that its customers conduct by providing them with credit and technology solutions that make their businesses work more efficiently.”
Google is the latest company to want to help these small businesses with their finances. It already works with many of them. Last year, Facebook started a loan program in India to help small and medium-sized businesses get loans.
The social media giant is working with Indifi, which is backed by CDC Group, to give small loans of between 500,000 Indian rupees ($6,720) and 50,00,000 rupees ($67,200) at a fixed interest rate of 17 percent to 20 percent per annum. The businesses won’t have to put up any collateral or pay a fee to join, it told TechCrunch.
In a statement, Tyler Day, a partner at Creation Investments, said, “We’re excited to invest again in the Progcap team as they grow their product line and serve more last-mile retailers in India.”
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