How Soptle is revolutionising the way credit is extended to small businesses

In the bustling economic landscape of India, small and medium enterprises (SMEs) serve as the backbone, contributing significantly to the nation's GDP, employment, and industrial output. Despite their critical role, these businesses often face a daunting challenge: accessing timely and cost-effective credit. 

The traditional banking system, with its stringent criteria and lengthy processes, has not been able to adequately serve the unique needs of these enterprises. This gap in the financial ecosystem not only hampers the growth of SMEs but also limits their potential to contribute more substantially to the economy.

Enter Soptle, a Gurugram-based B2B credit lender, founded in 2021 by the young entrepreneur Pravas Chandragiri from Balasore. 

Who is the founder?

At just 19 years old, Chandragiri embarked on a mission to revolutionize the way credit is extended to small businesses in India. Recognizing the pivotal role of SMEs and the hurdles they face in securing credit, Soptle was conceptualized to bridge this gap. 

The startup aims to enhance the financial well-being of SMBs, improve their operational efficiency, and optimize cash flow, thereby enabling them to thrive in a competitive market.

It stands out by leveraging advanced technology to offer a suite of financing solutions designed to meet the diverse needs of small businesses. Within a short span of two years, the startup has made remarkable strides, achieving an annualized Gross Loan Value (GLV) of $30 million.

Offering financial solutions

The financial solutions offered by Soptle are meticulously tailored to cater to the specific requirements and repayment capabilities of small enterprises and retailers. These include term loans, invoice financing, and lines of credit. 

Term loans from Soptle are ideal for businesses looking to make long-term investments, such as purchasing new equipment or expanding operations, without the need for invoices or collateral. 

This flexibility allows businesses to plan and grow without the immediate financial burden. Invoice financing is another innovative solution where retailers can use an invoice as collateral to secure a loan. 

This model is particularly beneficial when a retailer is short on funds but needs to purchase products from a distributor. Soptle's platform facilitates this process efficiently, ensuring that funds are released to the distributor in real time, thus maintaining the supply chain's fluidity. Lines of credit offer a flexible financing option, providing businesses with a pre-approved credit line that they can tap into as needed. 

This ensures that businesses only pay interest on the amount they use, making it a cost-effective solution for managing cash flow. 

Data-driven approach

The startup' approach is data-driven, utilizing an AI-based credit engine that assesses risk and offers collateral-free loans based on credit scores, bank transactions, and distributor and brand history, among other factors. This technology-driven methodology enables Soptle to offer more personalized and accessible financial services to SMEs. 

It claims to have garnered a significant user base, including 17 enterprises, over 350 distributors, and partnerships with five modern trade merchants. 

With monthly disbursements amounting to Rs 32 crore and an annual total of Rs 307 crore, Soptle is on a rapid growth trajectory. The company's affiliation with banks and NBFCs facilitates smooth loan disbursement, and its revenue model, based on the interest rate differential, ensures sustainability and profitability. 

Funding and investors

Soptle has raised $1.5 million in funding across two rounds from notable investors, including Kube VC, We Founder's Circle (WFC), Iceland Venture Studio (IVS), and Nyra Ventures, among others. 

The demand for credit among MSMEs is growing, with a reported credit gap of close to $530 billion. Despite the vast number of MSMEs in India, only a fraction have access to formal credit, highlighting the significant market opportunity for Soptle. 

Competitors

The startup operates in a competitive space, with players like Epaylater, Mintifi, Loantap, and Lendingkart, but its unique approach and technology-driven solutions set it apart. In conclusion, Soptle's story is not just about a startup's journey to success; it's about enabling the growth and sustainability of SMEs in India. 

By addressing the critical challenge of credit accessibility, It is empowering small businesses to achieve their full potential, thereby contributing to the broader economic development of the country. 

As Soptle continues to expand and innovate, its impact on the SME sector promises to be transformative, making it a beacon of hope for businesses striving to navigate the complexities of financial management.

The B2B credit market in India is undergoing a significant transformation, driven by the rapid growth of the economy and the evolving needs of businesses for more accessible and flexible credit solutions.

Despite India's status as one of the fastest-growing economies globally, there's a notable gap in accessing formal credit, especially when compared to developed nations. This gap is being addressed by banks and financial institutions through the introduction of innovative payment products and instruments, aiming to make formal credit more accessible.