Pune-based fintech startup EarlySalary has raised $782K debt financing from IFMR Capital. Earlier this year in May 2017, EarlySalary had raised $4 Mn Series A funding from IDG Ventures India (IDGVI) and Dewan Housing Finance Corp Ltd (DHFL).
The startup will use the recently raised funds to accelerate growth. The consumer lending fintech startup claims that it has disbursed about 7,000+ loans last month.
Commenting on the investment, Kshama Fernandes, CEO, at IFMR Capital said, “Our strategy has always been to identify high potential companies at an early stage and support them by providing capital, customised structured product solutions and access to a wide spectrum of investors. We believe they are pioneers in using technology to disrupt the current retail credit ecosystem, successfully impacting a large number of professionals who are not served by banks”.
Founded in 2015 by Akshay Mehrotra and Ashish Goyal, EarlySalary is a mobile-first lending platform. It provides salary advances and instant cash loans and provides a smart risk scoring system. These loans are similar to salary/cash advances or credit card cash withdrawal. The startup currently has operations in eight cities including Mumbai, Pune, Chennai, Bengaluru, Hyderabad, New Delhi, Jaipur and Ahmedabad.
Co-founder & CFO Ashish Goyal said “We are confident of making our loan book stronger by disbursing 30,000+ loans per month by the end of this financial year. Looking at the current traction we are targeting to cross 1 Mn downloads over the next month”.
The fintech startup provides salary advance upto 50% of monthly salary to its users. The company claims that 70% loans are given in under 10 minutes. Apart from this, salary advance/cash loans are transferred to bank instantly.
The borrowing is usually between INR 8,000 to INR 2 Lakh. The money is lent at a cost as low as INR 9 per INR 10,000, per day. The company also partners with corporates as well as SMEs across the country to give salary advances to employees.
As per a Nasscom report, the Indian fintech software market is forecasted to touch $2.4 Bn by 2020, from the current $1.2 Bn. According to Inc42 Datalabs, fintech startups attracted the highest number of funding deals in H1 2017. Total investment made in this segment during the period stood at $2 Bn.
Earlier this month, Ahmedabad-based SME lending platform Lendingkart Technologies raised $10.9 Mn (INR 70 Cr) funding round, in the form of equity funds from Sistema Asia Fund, others. Existing investors Bertelsmann India Investment, Mayfield India, Saama Capital, India Quotient and Darrin Capital Management also participated in this round.
In February 2017, IFMR Capital and its alternative investment fund had invested in Bengaluru-based online lending platform Capital Float raised about $2.5 Mn (INR 17 Cr) from. With this round of funding, fintech startup EarlySalary will look to compete against other players in this segment include SMEcorner, Innoviti, FlexiLoans, KredX, etc.