College goers focused microlending platform Buddy has secured $500K pre Series A round from Blume Ventures and Tracxn Labs. The Bangalore-based venture offers short term loan to college students to purchase e-commerce products on monthly payment plans. The company has partnerships e-commerce majors including Flipkart, Amazon and Snapdeal.
The company plans to allocate the funding amount towards building product, hiring and marketing.
Students use Buddy for products ranging from mobile phones and laptops to cosmetics and footwear with the product price ranging from Rs 1,000 to Rs 90,000. The company claims to onboard 8,000 students on a monthly basis. Buddy follows marketplace approach and tied up with banks and NBFCs for loan finance.
Rajan Bajaj, CEO & Co-founder of Buddy said,
Students’ spending power has significantly increased over the last few years as Indian parents now spend more on education, leading to a strong need for a frictionless lending solution for millennials.
Students need to submit their ‘Student ID’ as well as phone numbers of a classmate and one of their parents to apply for Buddy. Borrowers who miss deadlines will receive messages from Buddy’s risk-management team. They also employed 100 plus part-time freelancers across Bangalore - mostly student ambassadors - to take care of operations in colleges and keep a check on fellow students who are late on their repayments.
Started by Rajan Bajaj (IIT Kharagpur) and Deepak Malhotra (BITS Pilani), Buddy collects and analyzes 1000 plus online and offline data signals, which help segment students into different risk profiles. The company is building student credit scores by leveraging the latest technology tools for e-verification, payments and fraud detection using data science and machine learning algorithmic models.
Adit Parekh, Principal, Blume Ventures said,
Educating students to a loan product and inculcating the responsibility of repayment is a huge game changer that Buddy is creating. We believe that Buddy has the potential to create a meaningful and trustworthy student rating system that will have far reaching consequences.
The company competes with Accel backed Quiklo that leverages technology based micro lending platform to enable EMI in e-commerce. It focuses on students and young professionals. Currently, Buddy is focusing on Bengaluru and has no plans to expand to other cities.