Reports from an 3 unnamed sources have suggested that Amazon is looking to invest in Capital Float, an alternative lender in India.
This investment will likely be a top up to the $45 million raised by venture capitalists in a Series C funding round in 2017.
They are an online platform that provides lending services to SMEs in India. Their loans are collateral free and unsecured, with low interest rates and lots of flexibility. They evaluate each business on their cash flow and future projections instead. Their loans help businesses manage their cash flow and invest for further growth, with the funds to be paid back within 1-12 months.
Karen Mills, former small business advisor to President Obama identified Amazon as a key player to watch in the SME lending market. However, it is not yet clear whether the investment in to Capital Float will bring about an integration of consumer finance or small business lending srvices from within the Amazon platform.
It has already lent over $1 billion to merchant who sell on their platform. Tech giants are expected to shake up and disrupt the SME finance market in the near future. On the subject of this, Karen Mills had this to say: “If you think about what Amazon already knows about its merchants, and then you think what Google knows about everybody who is buying and selling through its platform, one could imagine a world where they have much more information about both on the credit side, but also on the small business [side] itself,”
Google and Facebook have also been reported to be looking in to entering the financial services space, according to American Banker, and are in talks with regulators to find out how they can achieve their objectives.