Fintech startup IndiaLends takes shot at unorganized lending market, secures pre-series A funding
Delhi-based credit underwriting and analytics platform IndiaLends has raised a pre-Series A funding round led by DSG Consumer Partners. The amount of investment remains undisclosed. The round also saw the participation of angel investors Siddharth Parekh (son of HDFC chairman Deepak Parekh) and few others.
DSG Consumer Partners has also invested in Sula Wines, MSwipe, Veeba Food Services, Zipdial and Oyo Rooms.
Deepak Shahdadpuri, Managing Director, DSG Consumer Partners, commented,
We believe that IndiaLends has the opportunity to transform an important part of the financial services infrastructure. This will reduce the cost, provide a better mechanism to price risk, reduce time to assess credit and provide credit for the first time to many individuals who would not otherwise be able to access the formal credit channels.
Financial technology startup IndiaLends was founded by ex-Capital One professionals Gaurav Chopra and Mayank Kachhwaha in March 2015 with a vision to improve credit scoring techniques in the country and help more people get access to organized credit at better interest rates.
Inception phase
Gaurav, an alumnus of London Business School and St. Stephen's College, and Mayank, an alumnus of IIT Madras, conceptualized the idea while working together in Capital One in London. Mayank and Gaurav together have 15 years of consumers and small business credit experience.
Chopra says,
Lending in India is primarily based on a single credit score which means that a majority of the people in the country find it difficult to secure loans. Moreover, it can take anywhere between two and 10 days for institutions to make credit assessment. At Capital One, we used a lot of data points like bank transactions, utility payments, etc to build credit risk models that enabled instantaneous underwriting decisions. Our belief is that through the use of this data, deep analytics and machine learning algorithms, we will be able to help more borrowers secure loans (cheaper and faster) and help lenders make better credit risk decisions.
IndiaLends captures and analyses a variety of relevant data points that help in assessing a borrowers' credit worthiness. This in turn assists lenders (banks and NBFCs) in making informed lending decisions. Moreover, IndiaLends also provides a technology platform which is being used by some of the financial institutions to make credit assessments and manage loan originations.
Breakthroughs
In less than four months of commencing operations in Delhi, the company now caters to a large number of borrowers and lending institutions and has helped assess risk for over 1500 customers. IndiaLends will utilize these funds raised to grow its operations, improve technology and analytics capabilities and acquire high quality talent.
Mayank Kachhwaha says,
We are seeing an explosive growth in demand, and will use these funds to enhance our technology and hire quality talent. This will enable us to grow our platform, enhance end-user experience, and allow our clients to generate more value from the online services we offer.
A sneak peek of the loan market in India
Speaking about the unorganized lending market in India, Chopra highlighted that in India organized lending is available only to a lucky few mainly those with high CIBIL scores. The remaining borrowers are at the mercy of unorganized lenders and loan sharks, and end up paying high interest rates.
IndiaLends vouched to change that and help both borrowers and lenders make better credit decisions. One of the biggest differentiator of IndiaLends as compared to other players in the market is that they are not balance sheet lender as they do not take credit risk.
Chopra avers,
We've received about 1800 applications till date, we've approved close to 200 loans. All of our loans are collateral free, ticket sizes have ranged from 35k to 5.5L.