[Funding alert] Fintech startup CredRight raises $2.7M from 9Unicorns, Spearhead Capital, Venture Catalysts, and existing investors
Data-driven fintech startup CredRight will use the fresh funds to increase the managed loan book, expand the team size, and invest in tech platforms and analytics.
Hyderabad-based fintech startuphas raised funding of $2.7 million (approximately Rs 20 crore) from , Spearhead Capital, and , along with existing investors , and other angels.
CredRight is a data-driven lending platform that facilitates credit to small businesses and MSMEs via NBFCs and banks. It has built a tech-based distribution model to reach out to India’s 10 milion registered chit subscribers that are largely located in Tier 2 and 3 cities. The platform uses a proprietary credit-modelling algorithm that leverages chit data to build objective credit profiles.
Neeraj Bansal, Co-founder and CEO of CredRight, said, “CredRight believes that lending is an underwriting and collections business first, and the funding during COVID times is a great validation of our sound operational and productivity metrics. This fund raise will provide CredRight more fuel to transition chit customers to formal lending with access to simple, fast, flexible, and transparent loans.”
CredRight claims to have disbursed more than Rs 50 crore worth of loans to more than a thousand customers. The funds raised will be used to increase the managed loan book, expand the team size, and invest in tech platforms and analytics.
End-to-end digital process
Dr Apoorva Ranjan Sharma, Co-founder and Managing Director, 9Unicorns, said India is run by its 63 millions small businesses, but in the absence of accessible capital, they struggle to scale to the next level.
"According to recent reports, less than 15 percent of SMBs in the country have access to institutional lending. CredRight has deployed an end-to-end digital process, which enables small businesses to get a loan in the bank account within three to five business days. Their product has the potential to bring large-scale revolution in the SMB lending, and can scale rapidly. We are looking forward to supporting their journey in the coming years,” he said.
Sunil K Goyal, Managing Director and Fund Manager at existing investor YourNest Venture Capital, said the company's underwriting model, using proxy data from chit funds, allows it to have one of the lowest NPAs in the industry during the pandemic, and with the recent round of funding, company would be able to grow its loan book 4-5X.
Edited by Teja Lele