Peer to peer lending platform Finzy on Monday announced that it has raised $2.3 million in Pre-series A round. This includes $1.3 million raised in the first tranche in March 2018.
Not revealing the names, the Bengaluru-based company said that it had raised the funding from senior professionals from the Banking, Financial Services and Insurance (BFSI) industry and successful entrepreneurs. The company plans to use the funding for geographical expansion, to refine its product as well as for strengthening the distribution of its product.
Speaking on the fundraise, Amit More, founder and CEO, Finzy, said,
“Our seed investors also participated in this round at more than four times valuation as compared to the seed round. This round will help us scale our business closer towards break even. Currently, Finzy is a team of 60 passionate colleagues working towards a single-minded objective of providing a hassle-free experience to our borrowers and create a new sustainable asset class for our lenders.”
Incorporated in 2016, Finzy is a digital lending platform that connects qualified borrowers with investors looking to invest in a new asset class that provides monthly returns.
According to the company, the rate of return for investing in Finzy is 15.5 percent.
In a statement, the company said that its monthly loan disbursements have doubled in the last six months. In an earlier interaction with YourStory, the company had said that it had disbursed loans of nearly Rs 6 crore over the past 10 months (as of May this year).
In March, the company got close to 200 loan requests, which grew to more than 260 requests in April. The platform gets loan requests starting from Rs 50,000 to Rs 5 lakh, with the tenure reaching up to 36 months.
Finzy is also looking to raise its Series A round by early next year.
In October last year, the Reserve Bank of India (RBI) published the P2P lending master directions. Following the new guidelines, Finzy applied and received the NBFC - P2P certification from the RBI.
Vishwas Dixit, Co-Founder & CMO, Finzy said,
“The RBI regulations have ensured that only competent platforms continue to offer Peer-to-Peer Lending services. The vacuum that Finzy’s new investment opportunity fills in between fixed deposits and equity is also a powerful value proposition to lenders on the platform. More than 40 percent of lenders on the platform are returning back to make repeat investments.”
According to industry estimates, the P2P lending market in India is expected to grow to a $5 billion industry by 2023. Prominent players in the space include Faircent, LendBox, i2iFunding, and i-lend.in among others.