After Rs 100 Cr fund raise, FlexiLoans raises first debt fund of Rs 45 Cr

Having raised Rs 100 crore in funding last October, FlexiLoans has now raised Rs 45 crore in debt to grow its loan book. 

Digital SME lending platform FlexiLoans on Friday announced a debt fund of Rs 45 crore raised from financial institutions.

The company, however, did not reveal the names of the financial institutions it raised the debt from. According to the company, the funds will be used to expand its proprietor loans and supply chain financing segment for MSMEs across India.

In October 2016, the company received its big push as industry stalwarts Sanjay Nayar, CEO of KKR; Vikram Sud, former head of operations and technology at Citibank; Anil Jaggia, HDFC Bank Chief Investment Officer; and Narayan Seshadri, ex-MD of KPMG’s advisory business, invested Rs 100 crore.

FlexiLoans intends to expand its reach to provide working capital loans to proprietors in 500 cities from around 175 cities in 26 states that it currently services.

FlexiLoans.com was started in October 2015. Founder Ritesh Jain said:

“Proprietors across the country have discovered a new way to get funds on tap from the product suite we offer. We will utilise these funds to expand our instant Proprietor Loans and Supply Chain Financing product suite. These funds that were raised at extremely competitive terms from leading financial institution(s) is symbolic of the growth trajectory and quality that we have.”

How does it stack up?

According to the company, FlexiLoans has 65 national partnerships, and has partnered with e-commerce websites like Flipkart and ShopClues, along with Point of Sale (PoS) payment system providers like PineLabs, lending to their merchant base.

In an earlier interaction, the founders had said that online merchants make up only 40 percent of the overall customers, while the remainder are offline mom and pop stores, targeted either directly or through PoS providers.

The average ticket size of loans is Rs 5 lakh to Rs 6 lakh, with the average turnover of traders between Rs 5 lakhs and Rs 50 crore.

The average rate of interest starts from 15 percent on the platform, and the company makes around 2.5 percent on every loan disbursed.

According to a statement released by the company, the platform gets over 4,000 applications per month, largely from Tier II, Tier III and Tier IV cities in India.

FlexiLoans.com founded by four ISB classmates Deepak Jain, Abhishek Kothari, Ritesh Jain and Manish Lunia.

Recently, lending major LendingKart raised $10 million in debt funding to build its loan book. LendingKart gives small ticket business loans of Rs 5 lakh to Rs 20 lakh to the MSME segment.