SME Lending Startup Lendingkart Raises $3.8 Mn Debt Funding From SBI

Ahmedabad-based SME lending startup Lendingkart Finance has raised $3.8 Mn (INR 25 Cr) in debt from the State Bank of India. The fundraise from SBI comes three months after the fintech platform secured $10.9 Mn (INR 70 Cr) funding from Sistema Asia Fund as well as existing investors Bertelsmann India Investment, Mayfield India, Saama Capital and others.

As per the official statement, the latest influx of funds will be utilised to bolster Lendingkart’s loan book. The fresh capital will also enable the startup to expand its geographical reach to over 950 cities.

Furthermore, a portion of the financing will come in handy to widen Lendingkart Finance’s offering to SMEs across the country.

Commenting on the fundraise from SBI, Lendingkart Technologies co-founder and CEO Harshvardhan Lunia said, “We feel extremely privileged to have partnered with India’s largest bank which also shares the same vision of supporting the unbanked SME sector. SBI, being one of the oldest and largest banks, has played a critical role in shaping India’s financial landscape for the last century.”

“Their rich experience and sound knowledge of the banking industry will enable us to bridge the gap between demand and supply of small business loans in the country. With the funds raised, we will further grow our loan books, expanding our reach to many more underserved SMEs,” Lunia added.

Lendingkart: Bringing SMEs Under The Umbrella Of 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 and working capital. Aligned with the government’s vision to achieve financial inclusion, the company focuses on providing short-term loans with small-ticket sizes.

With offices in Ahmedabad, Bengaluru , nd Mumbai, Lendingkart has disbursed more than 20,000 loans to over 12,000 SMEs across 23 diverse sectors. The SME lending startup is currently in the process of expanding its operations to over 950 cities across 29 states and seven union territories.

Till date, more than 370K SMEs have reached out to Lendingkart Finance to meet their credit requirement.

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. In July 2015, Lendingkart Group secured $10 Mn (about INR 63 Cr) funding from venture capital funds Saama Capital and Mayfield Fund.

Later 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. A month later, in June, the SME lending portal secured $7.7 Mn (INR 50 Cr) in debt funding from YES Bank.

Recently, in August, the fintech startup secured $10 Mn (INR 67 Cr) debt funding from Aditya Birla Financial Services, Kotak Mahindra Bank, Tata Capital, and a few other undisclosed investors.

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

According to Inc42 DataLabs, fintech startups in India raised a total of $2.59 Bn in 2017, with the biggest round being Paytm’s $1.4 Bn fundraise from SoftBank. As per the latest edition of the NASSCOM-Zinnov report, fintech currently is one of the most promising sectors in the Indian startup ecosystem, along with ecommerce and healthcare.

Other startups in this space include Quikrupee, SMEcorner, Innoviti, Biz2credit, Capital Float, FlexiLoans, KredX, smehelpline, and smegetmoney.

In a country where small businesses are often denied loans by traditional financial institutions for being asset-light, fintech startups like Lendingkart are working to make working capital easily available. With the latest $3.8 Mn funding from the SBI, Lendingkart is looking to widen its reach to more tier II and tier III cities in the country.