Mintifi raises $40 million funding round led by Norwest, Elevation Capital

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Business-to-business (B2B) lending platform Mintifi has raised $40 million in a Series C round of funding led by Norwest Venture Partners and Elevation Capital, the company said on February 8.

The round brings the company's valuation in the range of $150-200 million. The startup will use the funds to continue building its tech infrastructure, expand offerings, including Buy Now Pay Later (BNPL) solutions for small and medium enterprises (SMEs), scale the co-lending platform and deepen engagement across the supply chain, the startup said.

Founded in 2017 by Anup Agarwal, Ankit Mehta and Sanjoy Shome, Mintifi works with large companies and extends credit in exchange of supplying inventory across their supply chain network, including to distributors and retailers.

Its clients include Tata Motors, Bridgestone Tyres, Berger Paints, Polycab, NIVEA and Jockey.

The startup has seen more than four-fold growth year-on-year, with annualised purchases finance touching $300 million and it expects to cross $1 billion by 2023, the company said.

Speaking to Moneycontrol, Agarwal who is the co-founder and CEO of the startup said the company's non-performing assets (NPAs) were around 0.5 percent of its credit costs.

"We have a credit cost of less than one percent, and we don't spend any money in acquiring new customers. Since we deal directly with companies, we also borrow at a cost of just 10 percent," he said.

Prior to this round, Mintifi raised equity and debt to the tune of $60 million. This round of funding will enable Mintifi to expand their capital base to over $500 million.

Besides Norwest and Elevation, International Finance Corporation (IFC) and Lok Capital are also investors in the company.

"As part of our business model, the money is never paid directly to the SME borrower. We make the payment directly to the principal suppliers, indirectly funding these SMEs against an inventory that they are buying," Agarwal said. The model ensures that instances of frauds and inflated balance sheets are eliminated, he said.

The SME digital lending space has seen immense growth over the past two years after an initial slowdown in 2020 due to the onset of the coronavirus pandemic.

Most players like Rupifi, RazorpayX and KredX lend in partnerships with banks. Others like Lendingkart and NeoGrowth Credit lend from their books too, besides through partnerships.

The space set to grow as banks and NBFCs are willing to deploy a large amount of liquidity through partnerships—a model that enables them to lend while not taking the risk on their books entirely.

Investors, too, are bullish on fintech lending as Covid-19 opens up a host of possibilities in the form of data that can be used to underwrite these loans.

Niren Shah, Managing Director and Head at Norwest Venture Partners India, said, “Mintifi adopts a full stack approach to address the transaction, financing and payments needs of the B2B ecosystem through its unique B2B BNPL solution and technology platform. Mintifi’s offering has witnessed strong adoption from over 100 leading brands in India, while operating a profitable business model.”

Over the years, Mintifi created a distinctive business model with a very strong product-market fit and customer delight and as a result, the business has demonstrated strong growth as well as unit economics, said Mridul Arora, Partner at Elevation Capital.

Avendus Capital acted as the exclusive financial advisor to Mintifi on this transaction.