Lendingkart Acquires Upwards To Scale Offerings, Deal Pegged At INR 100-120 Cr

Fintech startup Lendingkart has acquired digital lending platform Upwards. 

Speaking to Inc42, Lendingkart founder and chief executive officer (CEO) Harshvardhan Lunia said that the deal was pegged somewhere between INR 100 Cr and INR 120 Cr. 

The move will enable Upwards to leverage Lendingkart’s credit, capital and distribution capability to further deepen its presence across the country. The acquisition will also enable Upwards to access Lendingkart’s knowledge base to achieve scalable metrics and positive unit economics in their business.

On the other hand, the acquisition will help Lendingkart strengthen its current offerings, especially those catering to small and medium businesses (SMBs) and leverage Upwards’ tech stack to better serve its existing clients. With the move, Lendingkart will also deploy the startup’s credit underwriting engine to streamline the user experience and the lifecycle of loan disbursement.

“Our acquisition of Upwards aligns with our mission of providing finance to the underserved through robust technology… Together, we are embarking upon the journey of improving access to credit to change the face of India’s financial ecosystem by bringing the indigent population on the financial map,” Lunia said. 

Echoing the sentiment, Upwards’ cofounder Abhishek Soni said, “We are extremely elated to team up with Lendingkart. Upwards has created a strong credit product for the low-income segment. With Lendingkart’s credit, capital and distribution capability, we plan to deepen our presence across the country to bridge the massive credit gap in the personal loan market in India.”

Upwards will continue to operate as a standalone entity under the Lendingkart Group and will be led by the existing team. 

Speaking to Inc42, Lunia further added that the consolidated entity will scale slowly from the ground up in the next 12-18 months. The idea is to fully understand the space, learn from the people who are already there, identify the right segment and then scale it up, added Lunia.

Founded in 2014 by Lunia, Lendingkart has an NBFC licence and largely offers loans to SMBs and MSMEs. Backed by marquee investors such as Temasek-backed Fullerton Financial Holding, Bertelsmann and Mayfield India, Lendingkart claims to have disbursed more than $1 Bn worth of loans since its inception.

The Lendingkart Group claims to have also evaluated more than 2 lakh applications and has disbursed loans to more than 1.6 lakh MSMEs in 4000+ cities and towns across the country.

The development comes after a year of fundraising spree that Lendingkart took last year. The lending startup raised INR 125 Cr in funding just last year while it has raised more than INR 1,050 Cr in equity since its inception. The acquisition also comes at a time when the startup continued to be saddled with losses which grew 7X year-on-year (YoY) to INR 203.4 Cr in FY22. 

On the other hand, Upwards was founded in 2017 by Abhishek Soni and Nimesh Verma. The Mumbai-based lendingtech platform offers personal loans to salaried professionals and also operates a proprietary underwriting engine that analyses more than 500 data points to ascertain the creditworthiness of a user. 

The startup is backed by marquee investors such as the Chinese venture capital (VC) fund Shunwei Capital, among others. Upwards claims to have disbursed loans worth more than INR 500 Cr so far and has a presence across 200+ cities. 

In a statement sent to Inc42, Lendingkart said that Shunwei Capital will no longer be part of the capable post the acquisition.

Curiously, the move to acquire Upwards comes at a time when there is growing scrutiny around digital lending apps with links to Chinese entities. Earlier on Monday, the union government banned as many as 94 digital lending apps including names such as Prosus-backed LazyPay, Ola’s Avail Finance, Indiabulls Home Loans, among others. While many of these startups have publicly denied being impacted by any such bans, there has been no official response on the matter. 

Both Lendingkart and Upwards operate in the burgeoning lendingtech space which has seen a big adoption in the past few years largely led by growing digital penetration and ease of access. The space is one of the biggest spaces within the fintech sector and is projected to grow to a market opportunity of $616 Bn by 2025.

(The story has been updated to reflect Lendingkart’s response that Shunwei Capital will exit Upwards’ captable post the acquisition.)