IFC, PayU invest Rs 114 cr in Vayana Network to boost trade credit to MSMEs

Vayana Network, India’s largest trade finance network, said that it has raised a further Rs 114 crore as part of its Series C funding from International Finance Corporation (IFC) and PayU, the Payments and Fintech business of Prosus. Vayana plans to use the funds to build products focused on helping MSMEs better manage their working capital and become credit ready.

Vayana Network as part of its Series C round had already raised Rs 283 crore from new and existing investors, including Marshall Wace, March Capital, Chiratae Ventures, CDC group, Jungle Ventures, and well-established family offices in India and abroad.

“While we are set to do more than $10 billion of trade financing in India alone this financial year, we are focusing on creating tools and infrastructure to help small businesses manage their working capital efficiently and sourcing trade finance at the most affordable rates,” said Ram Iyer, founder and CEO, Vayana Network. “We will continue to build on our leadership role in public trade infrastructure including GST (goods and services tax), e-Invoice and e-Way Bill and embedding credit for every business in the supply chain. FY 23 also will see the launch of Vayana ITFS (International Trade Finance Services) platform at GIFT City (Gujarat), which will enable exporters and importers access international trade finance facilities at competitive rates”

Wendy Werner, India country head at IFC, said by supporting the rapid growth of a key player in India’s digital SCF (supply chain finance) infrastructure, IFC will contribute toward increased data and financial integration, enabling better assessment of risk and provision of tailored financing. “As a result, this will expand access to finance for MSMEs deep in supply chains while helping the MSME ecosystem emerge from the Covid-19 crisis on a more resilient footing,” said Werner.

Vijay Agicha, global head of strategy and growth at fintech firm PayU, said PayU and Vayana both share a common vision of democratising SME's access to finance through technology. The collaboration between both companies will lead to multiple synergies with PayU's merchant ecosystem, especially the SME transaction platform and SME lending portfolio. “This investment is aligned with our ambition to capture the broader India SME credit opportunity,” said Agicha.

Supply chain finance in India is a $100 billion per month opportunity for financial institutions and 53 per cent of organisations are underserved in terms of credit due to legacy systems and business models. As per World Bank estimates, Indian MSMEs alone face a $380 billion credit gap. Vayana serves a critical need by creating an ecosystem where financing is embedded in a transaction, digitally authenticated and trade credit is offered seamlessly, for every type and size of business in the supply chain.