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Amazon may invest in SME lending platform Capital Float: Report

18 December, 2017

E-commerce major Amazon.com Inc.’s Indian arm is likely to invest $5-10 million (Rs 32-64 crore) in digital lending platform Capital Float, a media report said.

The investment by Amazon is likely to be a top-up to the recent $45 million Series C round raised by Capital Float, The Economic Times reported, citing three people it didn’t name.

As part of the transaction, Capital Float is likely to foray into consumer financing and start lending on Amazon’s platform, the report said.

A spokesperson for Capital Float, which lends mainly to small and medium enterprises, said in response to email queries from VCCircle that the report is speculative and that it does not comment on speculation. “In case there is any development in the future, we will intimate you of the same.”

A spokesperson for Amazon said: “We do not comment on speculation about what we may or may not do in the future.”

If the deal fructifies, it will augment Amazon’s financial services and offerings. Amazon has already made strategic investments in online financial services marketplace Bankbazaar and gifting platform Qwikcilver.

Amazon’s main homegrown rival, Flipkart, is also all set to foray into the financial products segment and will soon start selling insurance products on its platform.

Amazon has made clear its intent to create a native financial payments ecosystem via Amazon Pay and is likely to commit Rs 1,600 crore into this arm as part of its long-term play.

Capital Float, operated by Zen Lefin Pvt. Ltd, was founded in 2013 by Sashank Rishyasringa and Gaurav Hinduja. It is a hybrid marketplace where banks and non-bank financial companies co-lend along with the firm to borrowers.

Capital Float is one of the most significantly funded online lending platforms. It has raised a total of $86 million in equity financing so far from the likes of Ribbit Capital, SAIF Partners, Sequoia Capital India and Creation Investments, among others, according to data available with VCCEdge, the data research platform of VCCircle.

The firm has disbursed loans of more than Rs 2,500 crore to about 15,000 customers across 300 cities to date. It lends an average of Rs 8-10 lakh for an average period of around 18 months. The marketplace contributes 35% to the company’s total disbursals.

In 2016-17, Capital Float’s operating revenue rose nearly five-fold to Rs 46.58 crore from 9.45 crore the previous year. However, gross expenditure tripled to Rs 117.32 crore and net loss doubled to Rs 63.47 crore from Rs 28.99 crore the previous year.

*This article has been updated to include a comment from Capital Float.

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Amazon may invest in SME lending platform Capital Float: Report

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