Clear (formerly ClearTax), India’s largest fintech SaaS company, announced today that it has launched Invoice Discounting product for Enterprises, marking its foray into SME credit and B2B payments. The Invoice Discounting product will be available to Clear’s existing 3,000-plus enterprise customers to provide working capital solutions to their suppliers and help grow their businesses.
Clear, which provides a suite of SaaS compliance products for over 3,000 enterprises and over 600-thousand SMEs, has seen its “business network” evolve with GST, e-waybills, and e-invoicing. The platform already processes 200M+ business invoices with a gross value (GTV) of $400 billion.
MSMEs are the backbone of the Indian economy and having cash to grow is critical for their survival. However, it is estimated that these suppliers to Indian enterprises require credit on invoices worth over $200B (INR 15 lakh crores) annually, and this need largely remains unserviced. A study by Clear on 800-plus enterprises showed that supplier payments continue to be delayed by anywhere between 60-120 days, even after the MSME Act, 2006 which mandates MSME payments within 45 days. Invoice processing itself may take 5-20 days before payment can be released, which aggravates cash flow problems for the suppliers. Many of these suppliers are then forced to take credit from unorganized sources at unaffordable rates, since the traditional credit models rely on cumbersome application processes and heavy collateral.
This gap can be solved by tech-enabled invoice discounting, which is a form of credit where suppliers are paid early at a slightly reduced value. This form of credit is still nascent in India (~0.2% of GDP) in comparison to other developing economies such as China (~11% of GDP). The absence of a common platform for an enterprise, its suppliers and financiers to seamlessly process invoices for credit — is a blocker to run a successful invoice discounting program at scale. Clear’s presence in GST and electronic invoicing is best suited to address this bottleneck.
“We have deep experience of building fintech SaaS for enterprises which has led us to solve for the burning need of tech-based solutions for SME credit and B2b payments in the ecosystem. The tech-first supply chain financing products, starting with invoice discounting, will deliver outstanding experience for enterprises and their suppliers,” said Archit Gupta, Founder and CEO, Clear.
Clear’s Invoice Discounting product has been designed to deliver instant working capital and liquidity to suppliers, and is expected to process $3B by the end of FY24. The smart AI/ML-based platform will connect to ERPs and enable a discount rate selection that is acceptable to both customers and their suppliers. The enterprises can choose from a range of financing options to fund their early payments: they can use their own surplus cash, or opt for line of credit via banks, or go through the TReDs marketplaces from within Clear’s platform.
“We are partnering with banks and NBFCs to operationalise supply chain credit at scale by enabling quick, efficiently priced credit based on actual business performance and not just asset ownership,” Gupta added.
In October 2021, Clear raised $75 million in Series C funding led by Kora Capital, Stripe, Alua Capital, Think Investments, and existing investors to accelerate Clear’s expansion into B2B credit and payments plus expansion into international markets. Clear had previously acquired yBANQ, a Y Combinator-backed enterprise payments startup, in 2021.
Clear is India’s leading Fintech SaaS company with the mission of simplifying finances for Indian businesses and individuals. We are trusted by over 5 million Indian Taxpayers, more than 1,00,000 tax practitioners, 600,000 small businesses and 2,000 large businesses and brands. For small and large businesses, our product suite covers invoicing, GST, range of managed services and credit. For tax professionals, we offer comprehensive GST compliance, ITR and TDS filing solutions. For individuals, we offer tax compliance and wealth management. Clear has raised $65 Million in equity capital investment since its inception. The company was incubated in Y Combinator and is funded by Silicon Valley investors, including PayPal co-founders Peter Thiel’s Founders Fund, Max Levchin, and Scott Banister. Clear’s investors include Composite Capital, Sequoia Capital, and SAIF Partners. Please visit – Twitter, Instagram, LinkedIn, Facebook and YouTube for latest updates on Clear