Xtracap Fintech India Pvt Ltd: Company Profile

Background

Overview

Xtracap Fintech India Pvt Ltd, established in 2017, is a technology-driven supply chain finance company headquartered in Gurugram, India. The company specializes in streamlining channel finance for Tier 1 and Tier 2 distribution networks, offering innovative tools to enhance accessibility, minimize risk, and facilitate real-time financial transactions among brands, distributors, dealers, and non-banking financial company (NBFC) partners.

Mission and Vision

Xtracap Fintech aims to revolutionize supply chain finance by providing seamless, paperless, and digital financial solutions that empower businesses to achieve unmatched growth and operational efficiency.

Primary Area of Focus

The company's primary focus is on offering e-invoice financing, enabling businesses to unlock the value of their invoices in real-time, thereby providing instant liquidity. This service caters to both downstream and upstream channel financing needs, utilizing invoices and receivables as collateral to facilitate financing.

Industry Significance

Operating within the fintech sector, Xtracap Fintech addresses the critical need for accessible and efficient supply chain financing solutions, particularly for small and medium-sized enterprises (SMEs) in India. By leveraging technology to streamline financial transactions, the company plays a pivotal role in enhancing financial inclusion and supporting the growth of businesses across the country.

Key Strategic Focus

Core Objectives

Digital Transformation: Implementing 100% digital channel finance solutions to modernize traditional financing methods.

Risk Mitigation: Utilizing advanced algorithms for risk assessment to ensure secure and reliable financial transactions.

Market Expansion: Broadening the reach of financial services to a diverse clientele, including small manufacturers, suppliers, wholesalers, and independent dealers.

Specific Areas of Specialization

E-Invoice Financing: Providing real-time financing by unlocking the value of invoices, thereby offering instant liquidity to businesses.

Channel Finance Solutions: Facilitating seamless financial transactions between anchor brands and their distributors/dealers through integrated mobile applications.

Key Technologies Utilized

Advanced Algorithms: Employing sophisticated algorithms for real-time risk assessment and transaction processing.

Paperless Technology: Implementing digital platforms to ensure efficient and secure financial operations without the need for physical documentation.

Primary Markets or Conditions Targeted

SMEs in India: Focusing on small and medium-sized enterprises across various sectors, including retail, manufacturing, and wholesale distribution.

Tier 1 and Tier 2 Suppliers and Dealers: Targeting both upstream and downstream partners within the supply chain to provide comprehensive financial solutions.

Financials and Funding

Funding History

Angel Investment (May 2020): Raised $1 million in an angel funding round from undisclosed investors to enhance product offerings and expand geographically.

Majority Stake Acquisition (September 2023): IIFL Fintech Fund acquired a 51% stake in Xtracap Fintech for ₹25 crore, valuing the company at approximately ₹50 crore.

Intended Utilization of Capital

Product Development: Enhancing existing platforms and developing new digital solutions to meet the evolving needs of the market.

Geographical Expansion: Establishing a presence in additional cities across India to serve a broader customer base.

Operational Scaling: Investing in infrastructure and technology to support increased transaction volumes and ensure service reliability.

Pipeline Development

Key Pipeline Candidates

Xtracapneo Mobile Application: Designed for anchor brands and their Tier 1 partners, facilitating quick GST analysis and seamless onboarding of associated partners into the financing program.

Bridge2Capital Mobile Application: Tailored for Tier 2 partners and dealers, enabling them to apply for and avail short-term credit lines offered by IIFL Finance Limited through Xtracap Fintech's digital ecosystem.

Stages of Development

Xtracapneo: Fully developed and operational, serving as a comprehensive platform for anchor brands and their primary distributors.

Bridge2Capital: Launched and actively used by Tier 2 partners and dealers to access financing solutions.

Target Conditions

SMEs: Focusing on small and medium-sized enterprises requiring efficient and accessible financing options.

Supply Chain Partners: Addressing the financial needs of both upstream and downstream partners within the supply chain.

Relevant Timelines for Anticipated Milestones

Expansion Plans: Ongoing efforts to onboard additional retailers and expand the user base of both applications.

Product Enhancements: Continuous development of new features and services to enhance user experience and meet market demands.

Technological Platform and Innovation

Proprietary Technologies

E-Invoice Financing Platform: A proprietary system that enables real-time unlocking of invoice value, providing instant liquidity to businesses.

Integrated Mobile Applications: Xtracapneo and Bridge2Capital, designed to facilitate seamless channel finance between anchor brands and their distributors/dealers.

Significant Scientific Methods

Advanced Risk Assessment Algorithms: Utilizing sophisticated algorithms to evaluate and mitigate risks associated with supply chain partners, ensuring secure financial transactions.

Data Analytics: Employing business data analytics to gain insights into transaction patterns and optimize financial solutions.

Leadership Team

Executive Profiles

Mohammed Riaz: CEO & Managing Director. An alumnus of the Delhi School of Economics, Riaz co-founded Xtracap Fintech in 2017, bringing a vision to revolutionize supply chain finance through technology.

Jim Prouty: Strategic Advisor. Provides guidance on strategic initiatives and business development, leveraging extensive experience in the fintech sector.

Nitin Verma: Head - Tech & Customer Experience. Oversees technological development and ensures a seamless customer experience across platforms.

Inderjit Singh: Head - IT Infrastructure & Partnerships. Manages IT infrastructure and fosters strategic partnerships to enhance service delivery.

Raghunandan Bharadwaj: National Business Head. Leads business operations nationwide, focusing on growth and market penetration.

Saket Verma: Head - Credit and Risk. Responsible for credit assessment and risk management, ensuring financial security for all stakeholders.

Competitor Profile

Market Insights and Dynamics

The Indian supply chain finance market is substantial, with an expected valuation of ₹10 trillion by 2026, growing at a compound annual growth rate (CAGR) of 20%. This growth is driven by the increasing need for efficient financing solutions among SMEs and the adoption of digital financial services.

Competitor Analysis

KredX: A prominent player in the invoice discounting space, backed by Tiger Global, offering similar financing solutions to businesses.

Lendbox: A peer-to-peer lending platform providing alternative financing options to borrowers and investors.

Sarvatra Technologies: Offers banking software and cloud-based services to cooperative banks and smaller financial institutions, contributing to the fintech ecosystem.

Strategic Collaborations and Partnerships

IIFL Finance: A strategic alliance that combines Xtracap Fintech's fintech expertise with IIFL Finance's financial strength, delivering a comprehensive suite of supply chain finance services.

Operational Insights

Xtracap Fintech differentiates itself through its 100% digital channel finance solutions, advanced risk assessment algorithms, and seamless integration between its mobile applications, providing a unique value proposition in the market.

Strategic Opportunities and Future Directions

Market Expansion: Targeting 2 million small businesses across India in the next four to five years, aiming to bridge the credit gap in the MSME sector.

Product Diversification: Developing additional digital solutions such as payments, order management, logistics, insurance, and financial services to offer a comprehensive suite of services to clients.