India recorded an all-time high of marine product exports in FY22, with an export value of $7,740 million, a nearly 30% increase from the previous year. To meet the growing demand for marine product exports and help exporters in the industry expand into other growth ventures, Indian micro, small, and medium enterprises (MSMEs) need access to ready capital to solve their cash flow requirements and grow their business in a sustainable, predictable way.
Stellar Marine, one of the leading exporters of sea food like frozen shrimps and cephalopods, was able to achieve this much-needed business predictability and explore growth opportunities in both its marine and agro-businesses, thanks to a more adequate and faster access to credit on account of its partnership with digital trade finance platform,
Mumbai-based Stellar Marine, which registered a two-fold increase in business growth last year, is now forecasting a similar increase this year as well. Leveraging Drip Capital’s export financing solutions has enabled the company to have a better understanding of yearly growth levels, across both markets as well as clients. In addition, the company is now planning to expand its agro-business, a division it previously could not focus on too much.
“We now have Drip’s post-shipment credit along with other credit facilities. Therefore, we have financing, resources, processing facilities, workforce, and logistics in place. We are pretty much set to run our business operations like a well-oiled machine. This has given us much-needed business predictability and put us on the trajectory to scale big with both our marine and agro-businesses,” said Jayant Mirani, Founder and Managing Director of Stellar Marine Foods.
Challenges faced by marine exporters
Prior to its partnership with Drip Capital, Stellar Marine too had faced many of the financing, supply chain, and operational challenges that plague most exporters, such as LC receipts taking at least 10-15 days to process and transfer funds, suppliers demanding upfront payments, and lack of working capital affecting buyer servicing capabilities.
Due to market uncertainties post-Covid, suppliers demanded upfront payments, forcing exporters to choose between paying them upfront or losing out on new orders. To meet the flood of product inquiries and surge in demand at the time from customers across the world, marine exporters like Stellar Marine needed to ensure they have enough working capital to inject it into their operations and service the new orders.
That’s where Drip Capital came in, helping Stellar Marine with solutions to ensure the financing process is more resilient, faster, and immune to supply chain shocks, enabling the company to continue to grow sustainably. With faster access to funds, Stellar Marine was able to leverage the money to buy more sea catch, process it, ship more containers, and grow its business further with its existing buyers.
“The traditional modes of payment/credit periods can only take you so far in terms of your ability to prepare and ship more containers. That’s where Drip came into the picture. It improved the health of our cash flow quite dramatically and helped us solve the huge cash flow requirements, which I think are common to all marine exporters, especially during the peak season,” said Mirani.
The Drip Capital impact
The company increased its credit limit by an additional $300,000-$400,000 in just the first quarter of working with Drip Capital. It has also seen other benefits, such as the ability to sign more
, yearly contracts for larger orders, thus enabling the company to be more competitive, as well as save on purchases through
cash discounts of 18 percent to 20 percent when exporters source material on cash.
The company has also seen a slew of other benefits such as a 36 percent increase in average invoice value in the first year of working with Drip, a 75 percent appreciation in the credit limit, along with timely payment reminders and a fast, responsive, seamless user experience on the Drip platform.
“We won’t leave Drip very easily. The financing experience has just been extraordinary, and I am not exaggerating. We have not faced a single issue to date. Whenever we are stuck, our relationship manager is there to answer and resolve our queries, compared to banks, where the work generally moves more slowly, whether online or offline,” said Mirani.
More importantly, the partnership with Drip Capital has helped Stellar Marine significantly increase its sourcing, processing, and shipping capabilities, resulting in a two-fold increase in business volume and better growth predictability. No wonder Stellar Marine recommends that other exporters also explore ways to improve their cash flow and be open to faster financing solutions, such as the ones offered by Drip Capital.
“Just like how companies are now using technology to transform their operations, they also need to rethink their finances and look for ways to improve their cash flow; for this, a growth mindset is a must. I’d say that one needs to be open to new and faster forms of financing while taking calculated risks,” recommended Mirani.