A Bridge to Finance

Supply chain financier Finovate Capital is looking to tap into the demand for funds by small businesses post-lockdown

- Salil Panchal

In early May and after four months of deliberations, fintech company Finovate Capital finalised a multi-billion dollar deal with the Indian arm of European tyre maker Continental. The Covid-19 lockdown influenced the way the deal was sealed by Finovate’s co-founder and chief business officer Aljo Joseph and its chief product officer Pavan Matai, a former banker at RBL Bank: Through video calls on Zoom, and a series of phone calls with Continental’s financial controller and various lenders, as well as an exchange of detailed notes and presentations.

Providing finance to a tyre company during a period of economic standstill—and when no cars were sold in India during April—can be a bit tricky. For Finovate, it involved a bit of thinking ahead of the curve. While the demand for new passenger cars, and consequentially tyres, is likely to be sluggish for several months, the demand from commercial vehicles and trucks owned by large fleet operators is expected to pick up in May and June. Continental has been allowed to open its Modipuram plant in Meerut, Uttar Pradesh, and production is expected to start soon, if the infection spread isn’t severe in the area.

Finovate, a supply chain financing (SCF) firm, has multiple lenders such as large private banks, non-banking financial companies (NBFCs) and a small financial bank to service Continental and cover its entire dealer spectrum. Besides Continental, Joseph says Finovate has already finalised another 17 deals and has closed a pipeline with existing clients to the tune of `15,000 crore so far.

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