Fintech Startup LivFin Raises $5 Mn To Expand Operations

Delhi-based fintech startup LivFin, on Thursday (December 19), announced that it has raised $5 Mn from German development finance institution DEG, which a subsidiary of KfW Group.

The recently raised funds will help LivFin to further expand its operations and to achieve the assets under management (AUM) target of $40 Mn by March 2020. Rahul Chander, MD and CEO of LivFin said that the investment will be a boost to LivFin’s planned growth over the next 12-18 months.

Founded in 2017, LivFin is a non-banking financial company. The company grants small business loans, supply chain finance and working capital loans to small and medium enterprises (SMEs) in India. The startup also offers collateral-free credit to small business owners who work with mid-sized corporates. These corporates, which act as either supplier or as distributors for finished products of SMEs, act as anchors for these small businesses.

LivFin provides invoice finance solutions to SMEs through very short-term business loans, for 30 to 180 days. The loans are aimed to help businesses procure working capital for critical operations. The company offers financial products such as purchase invoice finance, sales invoice finance and working capital loans to SMEs.

The company claims that it has already built up a live book of over $20 Mn, and disbursed over $150 Mn in aggregate. It works with anchors and customers across multiple industries. So far, LivFin has secured funding from nine lenders totalling $14 Mn.

LivFin has also recently started its first co-lending structure with another NBFC, where the co-lender provides 80% of the funding and LivFin provides a balance of 20%. The entire management of the borrowers is being done by LivFin using its tech for a fee. According to the company, these structures allow it to further leverage its funds to provide financing to a significantly larger customer base.

LivFin, in its second year of operation, is backed by the family Office of Rakesh Malhotra, who has also promoted the SAR Group.

In India, fintech startup and companies offering loans have gained a lot of traction and investments. Recently, Chinese mobile manufacturer Realme has also ventured into the SME loan space.

LivFin faces direct competition from the Bengaluru-based invoice-discounting platform KredX, which has recently raised $26 Mn (INR 187 Cr) in its Series B funding round led by US-based Tiger Global Management.