International Finance Corporation (IFC), a member of the World Bank Group, has invested $10 million as equity in e-commerce platform Power2SME that helps small and medium companies buy raw materials at bulk prices.
Power2SME is backed by venture capital firms such as Kalaari Capital, Accel Partners, and Inventus Capital. Infosys non-executive chairman Nandan Nilekani had joined it as a strategic advisor through his investment in late 2015.
IFC will also advice Power2SME to help it expand beyond its current 14 states, improve the ability to provide working capital to SMEs by adding more banks as partners, and increase the number of users on its platforms by up to 10 times in five years, IFC said in a statement on Tuesday.
“Our investment in Power2SME will spur greater venture capital interest in the SME sector in the country and support India’s vision to become a global manufacturing hub,” said Ruchira Shukla, Venture Capital and Private Equity Lead, IFC South Asia.
Power2SME founder and CEO R Narayan said IFC’s experience in supporting the SME sector through financing and deep networks with banks and financial institutions will help the company in its vision to make SMEs bankable. “We have aggressive plans to boost our revenues and continue on our path of profitability,” he said.
Micro, small and medium enterprises account for 45 per cent of the country’s industrial output and 40 per cent of its exports.
There are 48.8 million MSMEs in India employing 111 million people.
Since 1956, IFC has invested in over 400 companies in India, providing $17 billion in financing to the private sector. Power2SME helps small and medium companies buy raw materials at bulk prices and get working capital without collateral.