Reports Monday (Dec. 18) said unnamed sources suggest Amazon is planning to invest in alternative lender Capital Float, based in India.
According to The Economic Times, three unnamed sources confirmed the news, which separate reports in VCCircle said would likely be a top-up to the $45 million in Series C funding Capital Float raised earlier this year.
Capital Float targets small- and medium-sized businesses (SMBs) with its lending service, though it’s unclear how Amazon’s investment in the company might lead to an integration of small business lending or consumer financing services from within the Amazon platform.
VCCircle said a spokesperson for Capital Float described the reports as “speculative.”
Amazon has already lent more than $1 billion to merchants selling on its platform, and industry players expect Amazon, as well as other tech giants, to initiative disruption in the small business finance market.
Earlier this year, former President Barack Obama’s small business advisor Karen Mills identified these players as the ones to watch in the SMB lending space.
“When I look at it from a U.S. view and from a global view, the banks are going to come back in full force, including Barclays and others, and then, on top of that, you’re going to have definite presence of Amazon players,” she said at the LendIt Europe conference in October. “Amazon has clearly signaled they’re going to provide at least financing for their merchants that they know, and that’s very smart.”
“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,” Mills added.
Separate reports in American Banker in September said Amazon, Google and Facebook are all exploring ways to enter into the financial services space and have reportedly initiated conversations with financial regulators as part of that objective.