IIFL Group’s early-stage investment vehicle – IIFL Fintech Fund – has invested an undisclosed amount for a majority stake in a supply-chain finance platform Xtracap Fintech India Private Ltd, which focuses on channel financing. This is IIFL Fintech Fund’s first investment in a supply chain finance company.
Xtracap Fintech India Private Ltd offers e-invoice financing, which allows businesses to unlock the value of their invoices in real time, providing instant liquidity. Xtracap’s dual app technology serves both downstream and upstream channel financing needs. Xtracap facilitates a holistic ecosystem where partners, distributors, and suppliers can seamlessly access financial services tailored to their specific requirements. This enhances financial inclusivity within supply chains and drives sustainable growth for all stakeholders.
The micro, small and medium enterprise (MSME) sector forms the backbone of India’s economic structure, accounting for 29% of the country’s gross domestic product and 49% of its exports. Supply-chain financing presents a promising solution to bridge the credit gap for MSMEs. This innovative financing model enables suppliers and distributors in the MSME segment to meet their working capital needs while leveraging commercial relationships with large corporates. By using invoices and receivables as collateral, financing facility is made available.
Mehekka Oberoi, Fund Manager at IIFL Fintech Fund said, “Supply chain finance is ~INR 10 L Cr total addressable market of which ~INR 1.2 L Cr is served today. This is a huge addressable market. Especially for distributors which are not served by the banks. They are looking for financing opportunities from organized players. A tech enabled solution can help reach the tail end of these distributors and give them access to finance. Xtracap’s technology driven solution enables this.”
Mohammed Riaz, CEO of Xtracap Fintech said, “We are thrilled about the infusion of capital from IIFL Fintech Fund. Our commitment to 100% digital engagement, coupled with groundbreaking features like e-invoice financing and dual app technology, positions us as a disruptor in the fintech landscape. We are excited to continue driving financial inclusion and shaping the future of financial services.”
In August 2021, IIFL Fintech Fund was established with a corpus of Rs.210 crore and sponsorship from two group companies – IIFL Finance and IIFL Securities. The financial services group with a large retail interface is aiming to offer last-mile credit with the help of cost-effective technologies. The fund’s investments include Trendlyne, Leegality, FinBox, DataSutram, Multipl, Finarkein, TrustCheckr, Finvu, Insurance Samadhan and EasyRewardz
The fund is an extension of #IIFLDisrupt program launched by IIFL Group in 2020 that aimed to provide financial, mentoring and business support to solution oriented Fintechs, as pandemic affected the economy and start-up space.
