GoTrade, the inventory finance product of Drip Capital, provided $4 million in inventory financing to a seafood importer based out of New Jersey.
Drip Capital has been offering this inventory financing product to the importing community in the U.S. for about a year. Previously, the Palo Alto, CA-based company was providing post-shipment financing solutions to SMBs in emerging economies such as India and Mexico. So far, the company has issued credit worth $800 million to more than 400 exporters in these countries.
“The core value of the company is to innovate and solve the problem of the export-import community,” Pushkar Mukewar, co-founder and co-CEO of Drip Capital, said. “Go-Trade is part of this effort where we are trying to solve the working capital issues among the buyers’ community.”
Go-Trade provides lines of credit that buyers/traders can avail by pledging their inventory to the company. From in-transit shipments to unsold inventory at any public warehouse, SMBs can sell their inventory to Drip to solve their working capital problems. In return, Drip will release 80% of the inventory value upfront. SMBs can buy back the inventory as and when they need to sell the commodity to other parties, in any quantity.
“The SMB doesn’t have to buy back the entire inventory in one go. Instead, it could free up the inventory depending on the orders received,” Neil Kothari, co-founder and co-CEO of Drip Capital, said. “SMBs can avail a credit line of up to US$10 million with just one click and zero paperwork. We have also built capabilities to fund in-transit cargo,” Kothari said. “This new product will allow us pay the supplier on behalf of the buyer before the cargo even reaches U.S. shores.”
“We have received a lot of queries about the impact of the COVID-19 pandemic on trade and on our offering,” Mukewar said. “The team at Drip Capital is confident that international trade of essential commodities like seafood and meat will continue despite the current situation. We are focusing our efforts on limiting disruptions to our clients and will continue to support them in every way we can to facilitate and assist with their working capital needs.”
Drip Capital is a financial technology company backed by Accel, Sequoia and Y-Combinator.