Clear acquires supply chain financing tech firm Xpedize for undisclosed sum

Deal will help the acquirer quickly scale and lead the invoice discounting space

Clear (formerly ClearTax), a fintech SaaS company, said on Wednesday that it has acquired supply chain financing technology firm Xpedize. This is Clear’s second acquisition after taking over B2B payments platform Ybanq, a release issued by the company said.

The release added that the deal, whose value was not disclosed, would speed up Clear's planned entry into SME credit and B2B payments.

The Xpedize platform, which will now be rebranded as Clear Invoice Discounting, delivers access to instant working capital and liquidity to suppliers. It is expected to process an annualised gross merchandise value (GMV) of Rs 1,000 crore by FY22-end. The AI/ML-based platform connects to ERPs and enables suppliers to select a discount rate that is mutually acceptable to them and their SME customers. Enterprises will not only earn an additional yield on their treasury cash, but will also be able to digitally manage supplier payments with seamless ERP integration and pay early using a range of financing options such as treasury cash, bank credit line, or TReDS marketplaces.

“Indian businesses need access to faster payments and efficient financing. While consumer payments have become real-time due to UPI, we believe much can be done for suppliers to larger companies. This acquisition speeds up our journey towards enabling these two lifelines for Indian businesses," said Archit Gupta, Founder and CEO, Clear, about the acquisition.

The Xpedize platform is already running at several large enterprises, allowing them to pay their suppliers faster. Gupta said a separate vertical within Clear will encompass all its technology-enabled financial services and help the firm quickly scale to serve several suppliers.

Gupta added: "A large chunk of businesses in India use our GST compliance suite, and these customers will reap the benefits of the network effect. Higher supplier participation, zero overheads for enterprises, and better discount rate discovery are our three focus areas to disrupt this space.”

The invoice discounting solution will be available to Clear’s existing 3,000-plus enterprise customers. By providing working capital solutions to the vendors of their enterprise customers, Clear is targeting to achieve $3 billion throughput by FY24. The platform is already integrated with some banks and TReDS platforms. Over the next few quarters, Clear Invoice Discounting will integrate with many more banks and NBFCs to ensure a robust supply of credit to a wider supplier base.

Xpedize is led by ex-Citibank corporate bankers Regan Mithani and Deepak Gugnani and was funded by marquee investors including HDFC Capital and YourNest Venture Capital. The firm's team will continue to run the invoice discounting product and expand into other opportunities within Clear.

Clear raised $75 million last October in a Series C funding to accelerate its expansion into B2B credit and payments, and make a dent in international markets. Both, existing and new investors participated in the round, which took its total equity mop-up to $140 million. Clear's investors include Y Combinator, Composite Capital, Elevation Capital, Sequoia Capital, and Founders Fund. among others.

The fintech SaaS company currently caters to over six million individual taxpayers in India, 50,000 tax professionals, about a million small businesses, and 3,000 large enterprises. Its products cover a wide range of applications such as invoicing, GST, Income tax (including TDS solutions), wealth management and credit.