Trade Finance Platform Vayana Network Raises $38 Mn From Chiratae, CDC Group

Mumbai-based supply chain finance provider Vayana Network has raised INR 283 Cr ($38 Mn) in a Series C round. The round saw participation from existing and new investors, including Chiratae Ventures, CDC group, Jungle Ventures, March Capital, Marshall Wace and some of the large family offices from India and abroad.

Last month, Inc42 had exclusively reported that Vayana Network would be raising INR 144 Cr ($19 Mn) in a new round of funding from UK-based CDC Group, US-based March Capital, and Marshall Wace.

The startup plans to use the funds to launch newer products to cater to “every segment of the supply chain and for every type of trade”. It further plans to invest in technology, hire across functions, and build partnerships in the ecosystem.

The investment comes almost three years after the startup raised $4 Mn from IDG Ventures and Jungle Ventures.

Founded in 2009 by Ramaswami Iyer, Vayana Network is a B2B trade financial intermediary, which connects SMEs and corporates with financial institutions for low-cost access to trade loans.

“Over the last 4 years, we have grown 20x on quarterly financing volumes. We have reached $8 Bn in total financing to date,” Iyer said in a statement. The startup, last year, had claimed that it was aiming to double down on the loan disbursement to $10 Bn by 2022.

Vayana claims to have enabled $1 Bn+ financing through B2B card flows to 22K+ SMEs. Its base currently includes 1K+ supply chains in 25 different sectors across 20+ countries, including the US, Singapore.

According to the startup, its supply chain finance programs help lower credit costs by over 50% and improve financial coverage by 100%. Vayana’s compliance business also consists of GST Suvidha Provider (GSP) services, which it claims holds over 20% market share of the e-invoicing in India.

In 2018, the startup acquired SahiGST, a startup offering cloud-based GST return filing and compliance solutions. Thus, it added GST and E-Way Bill space to its portfolio offerings.

Its analytics business (GBS) helps customers to monitor the health of their business. Recently Vayana Network also received in-principle approval to set up an ITFS platform at the GIFT City (Gujarat).

The Changing Landscape Of Supply Chain Lending Industry

Digital lending is one of the fastest-growing segments in India’s evolving fintech industry. As per a Statista report, India’s digital lending market grew from $9 Bn in 2012 to $150 Bn in 2020, slated to reach $350 Bn by 2023.

In the current market, the value of supply chain financing is around INR 60,000 Cr. However, this is just 10% of the total addressable market for supply chain financing. The total market is estimated to be around INR 18 Lakh Cr based on the value of invoices raised by the suppliers to businesses.

According to Inc42 Plus analysis, within fintech, lending is amongst the hottest sectors right now. In Q3 2021, fintech startups raised $2.7 Bn in funding. Out of the total 79 deals reported in fintech, about 35% or 28 were recorded by the lending tech sector. The sector attracted $547 Mn in funding.

After the startup funding and acquisitions ecosystem saw a record-breaking Q3, the beginning of Q4 2021 saw IPO-bound Paytm acquire a 100% stake in Mumbai-based digital lending startup CreditMate.

Recently, Chennai-based CredAvenue, which connects enterprises with lenders and investors, raised $90 Mn in Series A funding led by Sequoia Capital, taking the startup’s valuation to $410 Mn.

Further, supply chain financing platform CredAble raised $30 Mn from Plutus Wealth Management and existing investor Oaks Assets Management to provide tailor-made working capital solutions for small businesses and build debt capital market products for corporates and financial institutions.

BNPL startup Capital Float raised $50 Mn in equity funding to strengthen and scale the platform and expand its partner ecosystem. Corporate retail financing startup Progcap also raised $30 Mn equity capital in Series C funding.

Some of the other lending startups in the supply chain financing ecosystem include Indifi, CashFlo, Ftcash, and CashE.