NAKAD

Key Highlights:

  • NAKAD, a fintech startup, has been seeded with $7 Mn.
  • The company works as an invoice discounting platform for micro, small and medium-sized enterprises.
  • The round saw the participation of angel investors: Razorpay, Zetwerk, Zolve, Five Star Business Finance and Bizongo.

NAKAD, a fintech startup, has been seeded with $7 Mn from Accel and Matrix Partners India along with AdvantEdge Founders. The startup was founded 4 months ago.

The round saw the participation of angel investors: Razorpay founders Harshil Mathur and Shashank Kumar; Zetwerk founders Amrit Acharya and Rahul Sharma; Zolve founder Raghunandan G; Five Star Business Finance CEO Rangarajan Krishna; and Bizongo founders Sachin Agrawal, Aniket Deb and Ankit Tomar, among others.

This funding will be used to expand NAKAD’s operations across India and develop new products. Apart from that, the fresh capital will also be used to improve the company’s tech infrastructure and to hire new talent across a range of industries.

NAKAD was founded in January 2022 by Ujwal Kalra, Sambhav Jain and Avinash Uttav. The company works as an invoice discounting platform for micro, small and medium-sized enterprises. In order to create an entire ecosystem on its platform, the startup is working with several anchor companies (large companies) and their suppliers (mainly MSMEs), as well as private banks and NBFCs.

Anchor companies are defined by NAKAD as large, growing companies with an extensive supplier base. By focusing on the degree of operations of suppliers, the startup classes them into tiers 1 and 2, then tiers 3 and 4. Suppliers who directly supply anchors are categorized as tier-1 suppliers, while suppliers who provide materials to tier-1 suppliers are referred to as tier-2 suppliers.

The platform allows MSMEs to sell discounted invoices to lenders depending on the creditworthiness of their anchors and so meet their working capital requirements. For suppliers to register on NAKAD’s platform, a fee is charged.

To provide financial assistance to small businesses, NAKAD has developed its own proprietary technology called MicroBill.

Adding to Kalra’s explanation, he said, “We tokenize the invoice by dividing it and moving it down the chain. Afterwards, stakeholders will know how many tokens or MicroBills they have in their wallet, and the banks will exchange their invoices for the money our suppliers get in return.”

According to Kalra, early payments can be accessed by everyone in the supply chain, not just tier-1 or tier-2 suppliers. By the end of this year, NAKAD plans to increase its workforce to 70 people. Additionally, NAKAD will be adding new products to its portfolio in the near future.

According to a recent report, the fintech market in India will reach $1.3 trillion by 2025. A whopping 47% ($616 Bn) of it will be in the lending technology segment.

On the growth of the fintech sector in India, Kalra said: “Each sub-sector within the fintech space has a lot of nuances and there are companies with multi-billion dollar valuations in each of them.”

Moreover, large private sector banks are also partnering with fintech startups in India and adopting their innovations, which means the new models will keep disrupting the sector.

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