Each year, $1.5 trillion of global trade is left on the table because exporters in emerging markets don’t have the working capital they need to fund their business. We founded Drip Capital because we believe technology can dramatically reduce this number and democratize access to much-needed capital in emerging markets. With the click of a button, we provide entrepreneurs and small business exporters with the working capital they need to grow and succeed.
To help us further progress on our mission, Drip has raised $25 million in Series B funding led by Accel, with participation from existing investors Wing, Sequoia India and Y Combinator and new investors Trusted Insight and GC1 Ventures. The latest round brings us to $45 million in venture funding and $55 million in debt capital, giving us $100 million to expand our product and reach new customers.
“SMB exporters in emerging markets contribute to over $2 trillion of global trade flows. Due to inefficient local financial systems, half of the small businesses get turned down by banks for the capital they need, many of which are creditworthy. Drip’s technology and proprietary underwriting enables it to identify these creditworthy SMBs and provide them with the working capital they need to grow.” - Arun Mathew, Accel
With more than $500M in loans financed, and 400+ exporters and 500+ importers already served across 60+ countries, Drip is expanding to reach more businesses.
When we launched Drip early 2016, we wanted to take a careful, targeted approach to ensure our model worked. We started by working with exporters in India, a country that accounts for $300B of exported goods each year. After seeing strong demand and interest in the region, we’re excited to share some exciting updates, including:
Strong growth trajectory: We’ve funded more than $500 million of trade to date. This represents 500% growth since we announced our Series A last year. To fuel this growth, we’ve also expanded to over 120 employees in six offices. Our offices are based in Palo Alto, India (Mumbai, Delhi and Bengaluru), Mexico City and Dubai.
Expansion into new regions: We are expanding our global footprint and launching in the United Arab Emirates, Mexico and the United States. With new funding in place, we can replicate the model we’ve created in India in other geographies by scaling the product, engineering, sales and marketing teams.
An offering specifically for importers: We’re adding a new offering to provide working capital for importers, which will allow businesses to make more purchases from international suppliers and increase their sales.
“We have been associated with Drip since its inception and have participated in all their funding rounds to date. It has been inspiring to see the company’s progress in the last two years. We are excited to support them in their next phase of growth as they take their business model global.” - Abhinav Chaturvedi, Accel
We’re proud to share that two-thirds of our customers come from cities that do not have an international bank branch, 80 percent are receiving trade finance for the first time, and on average, their businesses are growing 20 percent faster each year because of the financing we provide. Exporters working with Drip are selling their products to brand names including Honeywell, Sam’s Club, TJ Maxx, Whole Foods, and Zara and we’re inspired every day by the stories we hear from them.
A rice exporter in India, Shailesh Patel, recently took over the stagnant 30-year old business from his father. Energized and ambitious, he was able to secure orders from Sam’s Club through a distributor but was denied working capital from the bank to fulfil them. Local Indian suppliers required upfront payment, but his customer, Sam’s Club wouldn’t pay the invoice until 120 days after he shipped. Drip now pays Mr. Patel upfront for his invoices, so he can pay his suppliers on time without waiting for Sam’s Club to pay him.
“Due to the limited bank facilities available to us as a mid-sized exporter, our business started stagnating. With its collateral-free finance solution and an online approach to trade finance, Drip gave us the flexibility to service more orders which helped increase our revenue considerably.” - Siddharth Gupta, Director, Isinox Limited
When co-founder Neil Kothari was growing up in Hong Kong, his father ran an export business manufacturing leather garments in China and selling to the U.S. One of the biggest challenges in growing the business was getting access to working capital before getting paid. On the other hand, co-Founder Pushkar Mukewar, who hails from a business community, while growing up in India, saw the challenges SMB’s face while raising capital from traditional lending.
Local banks had manual, paper-based underwriting processes that required lots of human intervention, making them unable to service the high velocity of small-dollar invoices issued by the SMB exporter market. Little had changed decades later when Neil and Pushkar met at Wharton.
Together, they uncovered a huge opportunity to use technology to rebuild international trade finance from the ground up.
Drip uses electronic data and software to rapidly underwrite and finance cross-border transactions. With an automated system for financing transactions, Drip provides seamless customer experience and can finance a shipment with the click of a button. On the backend, Drip integrates with over 20 electronic data sources and has built proprietary algorithms to underwrite the risk of every shipment.
With new funding and a strong global team in place, we’re ready to level the playing field for exporters of every size and in every country.
Authored by Neil Kothari & Pushkar Mukewar, Co-founders & Co-CEOs, Drip Capital.
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