Finance automation platform CashFlo raises Rs 70 crore from General Catalyst, Elevation Capital

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Finance automation and payments platform CashFlo raised Rs 70 crore ($8.7 million) in its second round of capital led by General Catalyst with participation from existing investor Elevation Capital, the startup said on September 6.

Angel investors in the round included Jupiter founder Jitendra Gupta, Pine Labs CEO Amrish Rau, Uni founder Nitin Gupta, Five Star Business Finance CEO Rangarajan K, General Catalyst's Gokul Rajaram, Whiteboard Capital, Atrium Angels and xto10x Technologies founder Saikiran Krishnamurthy. Elevation had also invested in CashFlo’s initial fundraise in 2019.

"Over the past three years, we have heavily invested in our product and technology capabilities to constantly stay ahead of the market and bring a differentiated value proposition to our clients. Today, we are above the competition in terms of product and execution capabilities," CashFlo CEO Ankur Bhageria said.

Founded in 2018 by ex-Boston Consulting Group executives Bhageria and Dushyant Agarwal, CashFlo helps businesses automate their core finance processes and manage their cash flows better.

The startup said it will use the funding to grow its product lines for the CFO function, invest in core technology and expand its category leadership in the vendor financing automation market in India.

The startup said its flagship offering on dynamic discounting and vendor financing automation has grown by 800 percent over the past year, expanding its network to over 50 of India’s largest supply chains that include likes of Tata Group, L&T Group, Murugappa Group, ITC, Lupin, Delhivery, Thermax and Arvind among others; and a network of over 200,000 Tier I and Tier II suppliers and dealers.

"We are excited to back Ankur and the team at CashFlo as they help businesses across India optimise their cash management and vendor relationships. The pandemic and current macro environment are constant reminders that cash and liquidity are key indicators of business health,” Alex Tran, Managing Director, General Catalyst, said.

"We have seen an acceleration in adoption of B2B payments solutions globally as businesses try to cope with volatility and believe innovative players like CashFlo face a large opportunity ahead."

The platform helps buyers pay for goods and services early and earn >12 percent returns or pay later and unlock up to 180 days of working capital while ensuring GST compliance among suppliers and automatic payment reconciliations.

Suppliers, in turn, get an on-demand receivables discounting platform which allows them to collect-at-will from customers, giving them visibility into the buyer’s invoicing process.

Despite B2B payments in India totalling $11 trillion, managing cash flows for most businesses is a complex and draining process. Cash-rich businesses want better treasury returns whereas cash-strapped businesses want to pay vendors later.

The coronavirus pandemic also created significant stress in supply chains and the need for working capital among SMEs has only grown owing to the elongated credit terms that were negotiated by their buyers during the last two years.

"We are big believers in supply chain-led financial platforms, given the strong trust, scale and compounding network they are able to tap. CashFlo's growth in the past 12 months and quality of partners is testimony to the team's deep insights and ability to create win-win across stakeholders," said Mridul Arora, Partner at Elevation Capital.