Fintech startup EarlySalary, which offers instant cash loans and salary advances, has raised debt financing of Rs 5 crore from IFMR Capital. Previously, this past May, the company had raised a Series A round of $4 million (Rs 28 crore) in equity funding from IDG Ventures India and DHFL and plans to leverage its equity multiple times over the next few months.
In an earlier interaction with YourStory, Co-founder and CEO Akshay Mehrotra had said that almost 75 percent of the Rs 28 crore would be utilised for building their lending book. The remaining amount was to go into expanding their team, with a specific focus on machine learning skill sets, and helping grow the customer base.
EarlySalary has already disbursed more than 7,000 loans last month. Currently operating in eight cities including Mumbai, Pune, Chennai, Bengaluru, Hyderabad, New Delhi, Jaipur, and Ahmedabad, it is looking at expanding into other cities as well.
Kshama Fernandes, CEO, IFMR Capital, said,
“Our strategy has always been to identify high-potential companies at an early stage and support them by providing capital, customised structured product solutions, and access to a wide spectrum of investors. This association with EarlySalary fits right into that philosophy. We believe they are pioneers in using technology to disrupt the current retail credit ecosystem, successfully impacting a large number of professionals who are not served by banks.”
Co-Founder and CFO Ashish Goyal said they are confident of making the loan book stronger by disbursing more than 30,000 loans per month by the end of this financial year.
Started in 2015, the Pune-based NBFC focuses on providing instant cash and short-term loans to young working professionals in the country. The current product is a 30-day unsecured loan ranging in value from Rs 8,000 to Rs 1,00,000. The loans that EarlySalary offers are similar to salary/cash advances or credit card cash withdrawals. The firm charges an average of 2.7 percent on a monthly basis for the loans taken and claims to be cheaper than credit cards.
A few startups working on a similar model are Buddy India, InstaPaisa, and ReBase, among others.