Fintech or Financial Technology is changing India’s financial inclusion landscape. Several startup have created a niche in specific domains. One such start up is PROGCAP, which has established itself as one of the preferred finance channels for SMEs and retailers. The founders, Pallavi Shrivastava and Himanshu Chandra started this venture in 2017 to serve a segment, which is often neglected. The startup was recognized in the World SME awards ceremony in 2018.

1. Identifying that niche

The founders have worked in the supply chain domain and were well versed with the problems of retailers and SMEs. There are about 15 million retailers in India and most of them have difficulties financing the business venture. Personal funds are often deployed to keep the business running. Different suppliers have different credit days. Many a times cash needs to be paid upfront. It indeed was a leap of faith to serve this informal segment. Access of credit was a major gap for the underserved retailers. The market potential is huge at $ 8 billion approximately.

2. The struggle

The founders faced difficulties in identifying the right product match for the segment in the initial days. It was challenging to integrate everything in a single technology platform, considering retailers and SMEs have unique requirements. Everyone would have different margins and conversion cycles of the merchandise they stock. Another issue was getting access to quality data for underwriting the credit. Cost of acquiring a customer also had to be minimized.

3. Onboarding retailers

The innovative start up works with brands to onboard retailers and provides them the required working capital. Till date they have disbursed approximately Rs 1500 Crores via 3 lakh retailers approximately. They have entered into a contract with 50 corporate brands to achieve this milestone.

4. Advantage Progcap

Progcap has a virtual untapped market to it’s disposal. With GST formalizing the retail trade in India, the growth potential is unlimited. More and more retailers are getting registered in the GST platform, which will serve as ready data base for credit underwriting requirements. Regular GST payment records would ensure good creditworthiness of the retailer and proof of sales. The product offers interest free credit facility along with cash incentives, which makes the proposition attractive.

5. Inhouse technology

Most of the end to end technology framework was designed and built within the company. It is amazing to note that the company does not have any branches and all of the monitoring and follow up of the portfolio is via technology. The technology has also ensured good portfolio quality as mentioned by the company. Customer services is integrated with Watsapp for quick resolution of issues. The technology is designed to ease out supply chain financing bottlenecks and leverage on automation.

6. Recent developments

Ujjivan SFB has entered into an agreement for supply chain financing with Procap in May 2021. Short term overdraft facilities would be provided to dealers and sub dealers through this channel. However, the entire onboarding and credit underwriting process will be through Progcap’s tech platform.

Recently they raised a Series B investment of $ 25 million led by Tiger Global and Sequoia Capital India. With the funding raised they aim to diversify the products, build better technology and get more skilled human resources on board. Other investors include Grow X, Contrarian Drishti, Axis Capital Partners, angel investors Somak Ghosh and Abhishek Dalmia.

One can visit Progcap’s website here.

FAQs

Q. What is the corporate identification number (CIN) of Progcap ?

Ans. Progcap’s CIN is U74999DL2017PTC310632.

Q. Where is Progcap’s headquarters?

Ans. Progcap’s headquarters are in Qutab Institutional Area, New Delhi, India.

Q. What is Progcap’s current outreach?

Ans. Progcap is currently serving 1000k+ retailers in 500+ cities and 10+ industries. It also has 10+ supply partners and is working with 50+ corporates.

Q. How much funding has Progcap raised till date?

Ans. Progcap has raised $102 million till date.

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