Prime Venture Partners invests $750,000 in KredX

Prime Venture Partners today said it has invested USD 750,000 (about Rs 4.95 crore) in KredX, an invoice-discounting platform that connects credit-worthy MSMEs looking to raise working capital against their unpaid invoices to individual financiers.
Launched last year by IIT and Stanford alumni Manish Kumar, Anurag Jain and Puneet Agarwal, KredX (previously known as Mandii), enables the growth of micro, small and medium enterprises (MSMEs) by unlocking cash tied up in customer invoices that would otherwise be paid in 30 to 90 days.
"There are 36 million SMEs in India. Many of these often struggle to keep their cash flow intact and can hardly withstand the burden of late payments. They are in dire need for working capital. With our technology platform, we are helping them get access to working capital," Kumar, co-founder and CEO of KredX, said.

In parallel, retail financiers are looking for opportunities to invest in financial instruments that can provide them better returns in short term with relatively lower risk and KredX connects these two parties, he added.
When a business enters into an invoice discounting arrangement, the finance company will allow the business to draw down a percentage of the outstanding sales. The financing party, in turn, will charge a monthly fee for the service, and interest on the amount borrowed against sales invoices.
KredX charges a service fee from both the parties.

Kumar said the platform has already enabled about 1,000 transactions, ranging from Rs 1 lakh to Rs 1 crore but declined to comment on the number of SMEs or financing partners on board.

Kumar said invoice discounting is a largely unstructured market, which KredX is looking at tapping into using technology, data and statistics.
"We will use the funds to expand our team as well as strengthen our analytics and technology platform," he added.
Prime Venture Partners Managing Partner Sanjay Swamy said alternate financing and lending platforms are going to transform the way businesses and individuals gain access to capital.
"KredX is using technology to solve an obvious pain point for over 21 million MSMEs in India with hundreds of unpaid invoices. The core competency required for any credit product to scale is risk modeling. KredX is assembling an incredible team of experts in Data Science, AI and Machine Learning that will play a key role in scaling the business," he added.