Power2SME, a startup that enables small and medium companies to buy raw materials at bulk prices, has announced that it has raised about ₹64 crore ($10 million) in a fresh funding round.
The equity funding round was raised from International Finance Corporation (IFC), which is a private investment arm of the World Bank. IFC will also advise the company to expand its operations.
With IFC investing in the company and also advising on business operations, Power2SME will also be able to improve its ability to provide working capital to SMEs by adding more banks as partners.
Commenting on this development, R Narayan, CEO Power2SME stated,
IFC’s extensive experience in supporting the SME sector through financing and deep networks with banks and financial institutions will help us in our vision to make SMEs bankable. Indian SMEs are critical to making India a manufacturing hub and we must foster the sector if we are to meet the national imperative of inclusive growth.
With new capital coming in, the company is now planning to divert its efforts towards the aim of increasing the number of users on its platforms by up to 10 times in five years.
Ruchira Shukla, Venture Capital and Private Equity Lead, IFC South Asia, said,
Our investment in Power2SME will spur greater venture capital interest in the SME sector in the country and support India’s vision to become a global manufacturing hub. By working with SME-focused companies and partner financial institutions, we aim to improve access to finance for over one million SMEs in the next five years.
Power2SME was founded in 2012 by R Narayan. The platform aggregates raw material and product demands from hundreds of small and medium businesses and places bulk orders with suppliers and manufacturers. It currently operates in SME hubs of Gujarat, Maharashtra, West Bengal, Tamil Nadu and Delhi-NCR.
Last year, the company had raised an undisclosed amount of funding from Nandan Nilekani and existing venture capital (VC) funds – Accel Partners, Kalaari Capital and Inventus Capital. With that funding round, Nandan Nilekani joined the company as a strategic advisor.