Capital Float which is a digital lending startup has managed to raise $2.3 Million (Rs.15 Crore) from Mahindra and Mahindra Financial Services through non-convertible debentures (NCDs). Previously, in January 2017, Capital Float have raised had raised Rs.17 Crore from IFMR Capital Finance through NCD’s.
What is NCD?
The debentures which can’t be converted into shares or equities are called non-convertible debentures (or NCDs). They are used as tools to raise long-term funds by companies through a public issue.
The Bangalore-based startup was founded in the year 2013 by Stanford University alumni Gaurav Hinduja and Shahshank Rishyasringa. Capital Float is an online platform that provides working capital finance to SMEs in India. They offer flexible, short-term loans that can be used to purchase inventory, service new orders or optimise cash cycles.
Commenting on the startup, CEO and Co-founder of Capital Float, Shahshank Rishyasringa said: “This NCD raise is in line with our overall strategy to deepen our liability side and will help us in achieving much better assets and liability management. We are always on the lookout for an opportune time to raise NCD at competitive borrowing rates.”
According to documents filed with the registrar of companies, Capital Float has allotted rated, unlisted, taxable, senior, redeemable NCDs to Mahindra and Mahindra Financial Services, a leading NBFC with a focus on rural finance.
Earlier in January, Capital Float has allotted the NCDs to IMFR. They raised the total capital of Rs 60 crore in between 2016-17. Rishyashinga said: “The NCD raise was meant for strengthening Capital Float’s lending books and said the company saw NCDs as a good alternative for fundraising, in addition to raising capital via term loans from banks and other financial institutions.”
Capital Floats has raised the total of $43.53 Million from five investors which included SAIF Partners, Sequoia Capital, Creation Management Investment Capital and others. The startup will use the fresh funds in investing in SME’s with a focus on rural finance. Read more about Indian Startup Ecosystem.