Amazon-backed Capital Float betting big on co-lending partnerships


Amazon-backed Capital Float, a digital lender, is betting big on co-lending partnerships to capture the financial services opportunities in the country. The firm also seeks to reduce its dependency on external funds.


This strategy is helping the firm — founded by Gaurav Hinduja, scion of Gokaldas Exports, and Sashank Rishyasring, alumnus of Stanford Graduate School of Business —penetrate deeper into tier-II and -III cities.

After enlisting Japanese firm Credit Saison to deliver working capital financing to micro, small and medium enterprises (MSMEs) across India, the Bengaluru-based firm has now forged a similar partnership with Poonawalla Finance, part of the $9.8-billion Cyrus Poonawalla Group.


The two entities will co-lend on Capital Float’s co-origination model to deliver last-mile credit to MSMEs.


According to Rishyasringa, the MSMEs will be able to apply for loans online and receive in-principle approval within four hours — the quickest turnaround time in the industry. Poonawala Finance, which started in April 2019, claims to have crossed Rs 1,500 crore in AUM (assets under management), making it one of most well-capitalised NBFCs.


Both firms are targeting disbursement of over Rs 500 crore over the next 12 months, with a monthly run rate of Rs 50 crore.


“For us, (forming) partnerships is a clear strategy. We believe by partnering with large NBFCs such as Poonawalla and other banks, we can capture the (fintech) opportunity faster and scale up,” said Rishyasringa of


“Poonawalla Finance believes in relationship-driven partnerships being integral to jointly achieving mutual objectives and growth in a tightly contested market. Through our collaboration with Capital Float, we will expand our reach beyond metropolitan cities to tier 2-3 towns of India,” added Abhay Bhutada, CEO and MD of Poonawalla Finance.


Though limited to top metros and tier-I cities initially, digital lending has fast gained traction in smaller cities and towns, backed by robust digital infrastructure and internet connectivity in such places, over the last couple of years.


According to Capital Float, close to 50 per cent of its loan applications comes from smaller cities. The firm has recently crossed $1 billion in lifetime disbursals.


The overall transaction value in the Indian fintech market is estimated to jump from approximately $66.1 billion in 2019 to $137.8 billion in 2023, growing at a CAGR (compound annual growth rate) of 20.18 per cent, says a report by PwC and Assocham.


Emerging markets are leading the way, with both China and India at an 87 per cent fintech adoption rate in 2019, significantly higher than the global average of 64 per cent, according to EY’s Global FinTech Adoption Index 2019.



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