SUMMARY
The mortgage startup is expected to close the Series B funding round in January 2023
PE funds and growth-stage funds are expected to participate in the round which will result in equity dilution of 24%
The startup is expected to use the fresh funding to increase its loan book and grow its assets under management to $350 Mn
Mumbai-based mortgage startup Easy Home Finance Ltd is in talks of raising $50 Mn in its Series B funding round, sources told Inc42.
“Prominent private equity and growth stage funds will be participating in the funding round. The round is expected to close in January 2023 at a 24% stake dilution,” an industry source said.
This would translate to a valuation of a little over $200 Mn.
Founded in 2018 by Rohit Chokhani, Easy offers ‘instant’ home loans to customers across the country digitally. Registered with the National Housing Bank, the startup operates on the physical-digital model and offers faster loan processing and disbursements. It raised $15 Mn in its Series A round led by Xponentia Capital Partners in July 2021.
The fundraise comes at a time when geopolitical tensions and increase in interest rates by central banks across the world to curb inflation have resulted in a funding winter for the Indian startup ecosystem. Indian startups raised $24 Bn funding in 2022 till November as against $37 Bn raised in the entire 2021.
Led by the pent up demand post the pandemic, the credit uptake is on a rise in the country. According to the RBI data, the banking sector’s non-food credit grew 17.9% during the fortnight ended December 2.
The demand for retail credit and working capital is expected to increase further, an analyst told Inc42.
The fresh funding will help Easy increase its loan book and grow the assets under management to $350 Mn. The startup will use the fresh funds to disburse new loans and expects it to last for about 18 months, the source said.
The funding will help it continue to grow 20% month-on-month, the source added.
In June 2022, Easy partnered with ICICI Home Finance Company (HFC) to offer digital-first loans to home buyers. At that time, Easy MD Chokhani said that the startup aimed to process over $500 Mn in loans over the next three years.
Of this, $200 Mn would be processed with the capital deployed by ICICI HFC, while another $50 Mn would be executed via its partnership with Kerala-based ESAF Small Finance Bank. The rest will be on company books, the source said.
In an earlier interaction with Inc42, Chokhani also indicated that the startup was looking to expand aggressively in FY24.
“We will look at expanding from the current 5 to 8-9 states next fiscal. Currently, we are servicing 60 locations. We aim to reach close to 100 locations by the Q2 of next fiscal,” he said.
