Mumbai-based peer-to-peer lending platform LenDenClub on Thursday announced that it has raised $1 Mn in a Pre-Series A funding round. The investment was led by Artha Venture Fund with participation from family offices such as UAE-based Transworld Group. Also, marquee angel investors Shuchi Kothari, Ramakant Sharma, Narendra Karnavat, Nandi Mehta as well as existing investors also participated in the current round.
The company plans to use the funds to expand its senior management team, develop innovative lending products and expanding its geographical reach to 12 states. Prior to this round, the company has raised seed funding of $611.8K from investors such as Venture Catalysts, Anirudh Damani, Daud Ali, Narendra Karnavat, Vikas Kapoor, Vikram Lakhotia, Krishna Jhunjhunwaala, and Jayesh Shah.
LenDenClub To Double Their Reach
Founded in 2016 by Bhavin Patel and Dipesh Karki, LenDenClub offers small-ticket loans directly to lenders from over 150 cities.
The company claims to offer 150 loans/day and it attributes the growth to its InstaMoney platform. InstaMoney provides small-ticket loans disbursed into the bank accounts of salaried individuals within 24 hours.
Bhavin Patel, cofounder and CEO, LenDenClub said, “The current funding round gives us the ability to double our reach and continue our quest in finding creditworthy borrowers that are not being serviced by the current financial institutions.” He said that the company aims to double the number of lenders on the platform to reach INR 500 Cr disbursal in the next 18 months.
The company leverages its proprietary tech-stack to reduce the time taken to underwrite a loan. Loans that meet the minimum preset qualification criteria get approved within 5 minutes and those that are rejected are underwritten by a back-end team with a 2-hour turnaround on the lending decision. The approved borrower profiles go live on a special lender app where over 10K active lenders choose whom they want to lend.
The funds from the lender’s account are auto invested if the borrower’s profile meets the criteria set by the lender. Over 70% of lenders activated this feature and LenDenClub founder, Bhavin Patel’s claims that 100% of all borrower profiles that went live on the platform have been funded.
LenDenClub is operating in six states and claims to have over 500K individuals registered on the platform. It claims to have disbursed over 50K P2P loans and managing a loan book of INR 60 Cr.
Artha Venture Fund’s managing partner, Anirudh A Damani said, “Their spectacular growth in lender registrations and money disbursed is even more heartening at a time wherein the entire lending ecosystem is petitioning the government for a bailout.”
The Indian P2P lending market is estimated to reach $4 Bn-$5 Bn valuation by 2023. Overall, a BCG report has predicted the digital lending industry to touch $1 Tn mark in the next five years. Some of the prominent players in the Indian market include IndiaMoneyMart, Monexo, LoanBaba, CapZest, and i2iFunding.
Between 2015 and Q1 2019, the total investment in Indian fintech startups was $7.62 Bn with a total deal count of 478. Out of the total funding, 50.13% or $3.82 Bn was in payments tech startups, followed by 25.49% ($1.94 Bn) in lending tech startups, according to DataLabs by Inc42.