Fintech Startup Lendingkart Raises $10 Mn Debt Funding; Looks To Expand To 700 Cities

Ahmedabad-based fintech startup Lendingkart Group has raised $10 Mn (INR 67 Cr) debt funding from Aditya Birla Financial Services, Kotak Mahindra Bank, Tata Capital, and a few other undisclosed investors.

The funding was secured by Lendingkart Finance Limited, a wholly-owned NBFC subsidiary of Lendingkart Group. The debt investment will be used to expand the SME lending platform’s presence to more than 700 cities around the country.

Commenting on the development, Lendingkart co-founder and CEO Harshvardhan Lunia said, “ All of us recognise that SMEs are the backbone of the economy and if India is to continue to witness high growth, then supporting them is non-negotiable. While the funds from this round will be used to replenish our loan book and widen our range across the country, we are confident that our relationship with these companies will help us collectively work towards empowering SMEs through seamless availability of working capital.”

Lendingkart: Bringing SMEs One Step Closer To Financial Inclusion

Founded in 2014 by ex-banker Harshvardhan Lunia and former ISRO scientist Mukul Sachan, Lendingkart is an instant working capital finance platform that provides SMEs with easy access to credit. At present, the company focuses on providing short-term loans with small-ticket sizes.

Speaking about Lendingkart’s niche business model, Manish Kothari, Senior EVP & Business Head, Corporate Banking, Kotak Mahindra Bank, added, “We, at Kotak Mahindra believe that each startup business has its own unique set of requirements linked to their business model and hence, understanding the nature of business and structuring the solution around it is essential. We are excited to work with Lendingkart Finance since we believe they have a unique and efficient proposition to finance customers – largely in a space which is not as effectively addressed by most banks.”

With offices in Ahmedabad, Bengaluru and Mumbai, Lendingkart has disbursed more than 12,000 loans to over 9,500 SMEs across 23 diverse sectors. The fintech startup uses proprietary technology tools based on machine learning algorithms and big data analytics to determine a borrower’s client’s creditworthiness. At present, the company provides short-term working capital loans ranging from $740 to $14.8K (INR 50K to 10 Lakhs).

According to Lunia, the process of credit assessment depends on the evaluation of around 5,000 data variables and parameters, including financial health, comparative market performance, social reliability, and compliance. Once the credit check is complete, it takes about 72 hours to get the loan issued to a borrower. This is usually done through affiliate lenders and other lending partners on the platform.

The firm has been very active when it comes to funding and acquisition. Till date, it has raised $64.35 Mn in five rounds of funding. In July 2015, Lendingkart Group secured $10 Mn (about INR 63 Cr) funding from venture capital funds Saama Capital and Mayfield Fund.

In June 2016, the fintech startup raised $32 Mn in (INR 205 Cr.) in Series B round. The funding was divided into two parts: $20 Mn as equity and $12 Mn as debt. The investment was led by Bertelsmann India Investments (BII), with participation from Darrin Capital Management and existing investors – Mayfield India, Saama Capital, and India Quotient.

In April this year, Lendingkart raised another $4.65 Mn (INR 30 Cr) in non-convertible debentures from alternative asset management firm Anicut Capital. Later in June, the SME lending portal secured $7.7 Mn (INR 50 Cr) in debt funding from YES Bank.

In October 2016, Lendingkart made news for acqui-hiring Bengaluru-based e-lending marketplace, KountMoney, as part of a move aimed at bolstering Lendingkart Group’s technology and data analytics capabilities.

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. An emerging domain within the fintech sector is alternative SME lending. Other startups in this space include Quikrupee, SMEcorner, Innoviti, Biz2credit, Capital Float, smehelpline, and smegetmoney.

In a country where small businesses are often denied loans for being asset-light, fintech startups like Lendingkart are working to provide easy access to credit. With the latest $10 Mn funding, Lendingkart is looking to widen its reach to more cities in the country.