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Prime Venture Partners invests US$750K in MSME lending startup KredX


By Sainul Abudheen K for e27

KredX is an online marketplace for MSMEs to raise working capital finance against unpaid invoice of their large clients

Over a year ago, we wrote about a fintech startup called Mandii, which offers an online bidding platform to help micro, small and medium enterprises (MSMEs) in India to find working capital easier. The over-a-year-old startup, which has now rebranded as KredX, has just got US$750,000 in funding from Prime Venture Partners, formerly AngelPrime.

KredX was started in 2014 by IIT and Stanford alumni Manish Kumar, Anurag Jain and Puneet Agarwal.

The startup has developed a credit risk assessment model and a technology platform for borrowers that ensures fast, hassle-free and secured transactions. For financiers, KredX provides complete trade services starting from sourcing curated invoices to conducting due diligence using its proprietary credit underwriting algorithms. It also manages complete paperwork for the financier and borrowers.

“Invoice discounting is a lifeline to SMEs but has never been organised and democratised. KredX will organise this largely unstructured market using technology, data and statistics. Working with the Prime Venture Partners team gives us not just capital but also the specialised and collaborative company building effort required to bring a sophisticated and highly nuanced product offering to the market,” said CEO Manish Kumar.

KredX claims it has already processed over 1,000 invoices, ranging from INR 1 lac (approx. US$16,000) to INR 1 crore (US$160,000) since inception, by-invitation only launch, and is now launching its service commercially.

The MSME sector has emerged as a highly vibrant and dynamic sector of the Indian economy by providing large employment opportunities and allowing equitable distribution of national income and wealth. However, these MSMEs often struggle to keep their cash flow intact and can hardly withstand the burden of late payments.

They are in dire need for working capital to sustain continued growth and production. In parallel, retail financiers are looking for opportunities to invest in financial instruments that can provide them better returns in short term with relatively lower risk.

KredX addresses both these issues by enabling MSMEs to raise working capital finance by discounting their unpaid invoices from corporates to a network of financiers on KredX`s platform. It has partnered with leading banks, accounting firms and law firms to ensure all aspects of the service are fully compliant with regulations and ensure consumer protection at all times.

Sanjay Swamy, Managing Partner, Prime Venture Partners, said: “Alternate financing and lending platforms are going to transform the way businesses and individuals gain access to capital. KredX is using technology to solve an obvious pain point for over 21 million MSMEs in India with hundreds of unpaid invoices. The core competency required for any credit product to scale is risk modelling. KredX is assembling an incredible team of experts in Data Science, AI and Machine Learning that will play a key role in scaling the business. We are excited to be a part of this journey.”

In this space, KredX is mainly competing with SAIF Partners-backed Capital Float, and Accel Partners-backed online deal-making platform for tech startups, LetsVenture.

Prime Venture Partners is a Bangalore-based seed fund led by serial entrepreneurs Sanjay Swamy, Shripati Acharya and Amit Somani. The fund is focused on building category-creating companies that are attracting large markets and are using technology in disruptive ways.

Prime Venture Partners’ portfolio includes LoveCycles, ZipDial (acquired by Twitter), Ezetap, SmartOwner, Synup, HackerEarth, happay, Nimble Wireless and Vidgyor.

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