How Drip Capital is Transforming Trade Financing

Drip Capital is a digital trade finance platform based in California. The company provides working capital to small and medium-sized enterprises engaged in cross-border trade in India, Mexico, and the United States, leveraging technology and data analytics.

Raison invested in the company in 2022 when it was in the growth stage following its Series B round. Since then, the company has grown significantly, raising a total of $153 million since April 2022.

In September 2024, Drip Capital raised $113 million in a new funding round, with investors including GMO Payment Gateway, Sumitomo Mitsui Banking Corporation.

Let’s take a closer look at how Drip grew from an idea to a successful growth-stage startup.

History

One of the biggest challenges for startups is securing funding. Banks prefer to lend to large, established companies with stable income due to lower risks. What options does this leave for small businesses and startups? Since 2015, the answer has been to seek financing from Drip Capital.

It all started when Pushkar Mukewar and Neil Kothari met at the Wharton School of Business. With experience managing debt portfolios at Capital One, Goldman Sachs, and BlackRock, they had expertise in both technology and finance. In 2015, combining their skills, they founded Drip Capital.

Banks have an almost one-size-fits-all product. But there’s a pretty substantial difference in how banks cater to larger clients versus smaller clients.

Neil Kothari

Drip Capital co-founder

Drip aims to bridge these gaps by combining machine learning technology with human expertise.

How Drip Capital Works

Collateral-Free Working Capital

Drip provides financing to SMEs without requiring collateral, enabling businesses to:

• Pay suppliers on time.
• Increase production capacity.
• Expand their product range.

Risk Assessment Platform

The company employs an advanced technology platform that:

• Applies over 100 checks to select reliable borrowers.
• Analyzes vast datasets using predictive algorithms and statistical models.
• Identifies high-quality financing opportunities while minimizing risks.

Alternative Investments for Institutional Investors

Drip attracts capital from major U.S. investors by offering:

• High returns.
• Investments uncorrelated with the stock market.
• Liquid investment opportunities.

Drip Capital’s Funding

To date, Drip Capital has raised a total of $528 million. Its investors include giants such as GMO Payment Gateway, Sumitomo Mitsui Banking Corporation, Accel, Barclays Investment Bank, and others.

In September 2024, the company secured $113 million in new funding, comprising $23 million in equity financing and $90 million in debt financing.

Equity funding was provided by leading Japanese institutional investors such as GMO Payment Gateway and Sumitomo Mitsui Banking Corporation, while the debt financing was led by IFC and East West Bank. According to Pushkar Mukewar, the new investment will primarily be used to scale the company’s trade operations.

The debt will be used to expand the number of working-capital loans it provides to SMBs, while the equity will be used for company and product expansion.

Debt for us is like raw material. And I think that is what we will continue to use to scale up the trade transactions, which we are originating and financing on the platform

Pushkar Mukewar

Drip Capital co-founder

The Future of Drip Capital

Today, Drip Capital has offices in more than 100 countries and has supported over 9,000 SMEs, financing them for a total of over $6 billion USD.

By attracting significant investments and gaining support from leading institutional investors, the company is actively scaling its operations in the U.S., India, and Mexico. Drip Capital continues to transform trade financing for SMEs, offering collateral-free capital powered by cutting-edge technology and data analytics.

The rapid growth of the company and the interest of major investors underscore the foresight and effectiveness of the Raison investment fund.

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