Silicon Valley’s Drip Capital has inked a deal with East West Bank that will provide the financial technology company with a $40 million line of credit. The FinTech said, in a press release, that it would use the money to expand its trade finance opportunities for small and medium-sized businesses (SMBs).
“Drip is growing at a rapid pace and institutional partnerships are a cornerstone of our capital markets strategy,” Drip Capital Co-Founder and CEO Pushkar Mukewar said in the announcement, noting the partnership with East West Bank “represents a significant milestone” for the firm. “It will further accelerate our ability to provide fast and seamless financing to global exporters and importers.”
East West Bank Vice President for Structured Finance Kristine H. Pfeilsticker said the bank is “pleased to provide financial support” to help Drip Capital achieve its growth plan. Both companies, she said, “have extensive experience in cross-border financing and a shared focus on offering innovative solutions to SMBs.”
Karl Boog, head of capital markets at Drip Capital, said the credit facility will provide the FinTech with the means to grow. “Despite the pandemic and resulting dislocation in capital markets, we have been extremely impressed with the execution and solutions-oriented approach of the East West Bank team,” Boog said.
Drip gives its clients access to working capital “quickly,” the company said. Drip works with over 1,500 sellers and buyers spread across 80-plus countries. The FinTech has financed over $1.2 billion in international trade since 2016.
The Palo Alto, California-based company offers trade financing products in the U.S. and such developing markets as India and Mexico. Drip has raised about $200 million through venture capital and debt since 2016. That includes $45 million in venture funding through investors such as Accel Partners, Sequoia Capital, Wing VC and Y Combinator.
Mukewar told PYMNTS in an interview, “The core problem we are trying to solve is, ‘How do you make credit access available for small businesses, which are engaged in cross-border trade?’” He added that, “for most of these businesses, the only credit option is perhaps their local bank, and banks are just not geared to service this segment well, and there are multiple reasons for it.”