Checkout finance provider Flexmoney, which works with both lenders and merchants, has raised $4.8 Mn in its Series A funding led by Pravega Ventures along with participation from Silicon Valley-based Z5 Capital.
The round also saw participation from several marquee individual investors including Ben Davey, former group head of strategy, Barclays Bank & CEO Barclays Ventures; Mike Smith, former chief product & technology officer, Barclays Ventures, and others.
Flexmoney is trying to capture the growing digital checkout finance market using EMI and buy now pay later (BNPL) services. The startup currently has over 25 Mn pre-approved ‘cardless’ EMI credit lines from 6 banks and NBFCs on its network platform.
Flexmoney aims to use the funds to scale its credit network footprint to many more lenders and merchants, as well as launch multiple additional products in the BNPL space.
Flexmoney says that it is attempting to democratise consumer credit by enabling trusted banks and NBFCs to easily offer ‘sachet-sized’, cardless credit lines to their customers. It is trying to address customer segments that are otherwise unviable to service via legacy bank offerings such as credit cards or personal loans.
Flexmoney’s partner network currently includes more than 3,800 online merchants, including a majority of the leading ecommerce merchants and brands in the country.
“Traditional credit instruments have failed to create a significant impression in the Indian market with credit card penetration standing only at 3% v/s 42% in China. Flexmoney’s InstaCred BNPL credit platform is leveraging technology to democratise credit access by enabling consumers and small businesses to instantly avail short-term digital credit at the point of purchase, without the need for credit cards or robust credit history,” said a spokesperson for Pravega Ventures in a statement.
In recent times, the Indian market has witnessed an exponential surge in demand for short-term loans related to purchases and spending. In addition to traditional credit cards, the demand for sachet credit products such as BNPL and ‘advance salary’ or payday loans is also increasing.
Posting a compound annual growth rate (CAGR) of 36%, India’s BNPL sector is expected to reach $100 Bn by the end of 2023, according to Medici Research. Within the BNPL niche, Flexmoney competes with the likes of ePayLater Simpl, Zestmoney, Slice, Paytm Postpaid, PayU’s LazyPay, Amazon Pay, Flipkart Pay Later among others.