On Wednesday, SME lending startup, Lendingkart Technologies announced that it raised Rs 70 crores (almost $10.51 million) as part of its equity funding from Singapore-based Sistema Asia Fund along with participation from current investors - Bertelsmann India Investment, Mayfield India, Saama Capital, India Quotient and Darrin Capital Management.
According to the company, this fresh round of funding takes the total funding count to Rs 534 crore (equity of 243 crore and debt of 291 crore).
Further, the company states that the latest infusion of equity capital enables the company to increase their loan book and strengthen its technology as well as analytics capabilities. Additionally, this will aid the company to further reach out to the under-served markets of India that continue to face lack of access to funds.
The news comes to heels, after it raised $10 million (Rs 67 crore) debt fund from Kotak Mahindra Bank, Aditya Birla Financial Services and other financial institutions, just last month.
While using the funds to lend capital to SMEs, the startup said that it is vying to reach over 700 cities across the country.
Speaking on the occasion, Harshvardhan Lunia, Co-Founder and CEO, Lendingkart Technologies said “We are excited to have Sistema Asia Fund on board and look forward to further building our relationships with existing investors who continue to bring to the table fresh perspectives and strategic insights on market dynamics of current and future trends. It is this support that will help us in becoming the leading lending platform for SMEs in India.”
While Dhruv Kapoor, Managing Director, Sistema Asia Fund Advisory said, “It is heartening to witness the exponential pace at which Lendingkart Technologies is scaling and solving a fundamental problem that ails small businesses in the country. Lendingkart’s data science driven approach and contact-less distribution model is the answer to the needs of the SME sector overlooked by traditional banking infrastructure. ”
Currently, Lendingkart Finance claims to have extended its reach to over 720 cities and towns in India. The entity offers collateral-free loans ranging from Rs 50,000 to Rs 10 lakh to small businesses.
On the other end, Pankaj Makkar, Managing Director, Bertelsmann India Investments said, “Digital lending is at an inflection point where technology and big data can help innovate on creating touch-less credit evaluation and distribution leading to access of capital to the SME sector across the country. We are proud to be part of such a journey where Lendingkart is looking at the traditional business model to overcome existing barriers.”
Their company’s subsidiary NBFC, Lendingkart Finance Limited has reportedly raised more than 100 crore since January 2017.
In a recent report, Harshvardhan Lunia had stated that the company was planning to raise an additional Rs 500 crore in debt and disburse Rs 1,500-1,600 crore worth of loans in 2017-18.
According to the Reserve Bank of India (RBI), this year, NBFC loans have also grown at 16.6 percent, compared to 8.8 percent for the banking sector. InCred has joined the party by disbursing loans worth Rs 100 crore in just two months of its existence.
The Reserve Bank of India’s Financial Stability Report (December 2016) shows a 33.1 percent increase in loan and advances given by deposit-taking NBFCs and a 12.5 percent increase in advances given by the non-deposit-taking NBFCs.