SUMMARY
Lendingkart’s operating revenue rose 1.2X to INR 616.4 Cr in FY22 from INR 494.9 Cr in FY21
The fintech startup’s provisions and loan write-offs stood at INR 434.7 Cr, contributing 50% to its total expenses
Lendingkart has an NBFC licence and disburses loans to micro, small and medium enterprises
Fintech startup Lendingkart witnessed over seven-fold increase in its consolidated net loss to INR 203.4 Cr in the financial year 2021-22 (FY22) as provisions and loan write-offs rose sharply.
The startup’s net loss stood at INR 28.4 Cr in FY21, which was only a 32% year-on-year (YoY) increase from INR 21.6 Cr in FY20.
While Lendingkart’s loss has widened significantly over the years, its YoY revenue growth has been comparatively muted. In FY22, the startup saw a 1.2X rise in operating revenue to INR 616.4 Cr from INR 494.9 Cr in the previous fiscal year. The startup’s operating revenue stood at INR 470 Cr in FY20.
Lendingkart has an NBFC licence and disburses loans to micro, small and medium enterprises (MSMEs). The startup has lately been on a fundraising spree. It has raised debt funding through two rounds in 2022 so far. In July, it raised INR 75 Cr from GMO LLC and Triodos Investment Management, followed by INR 50 Cr from InCred Capital and Yubi in August.
In April 2021, it raised $15 Mn in an equity round from Dutch entrepreneurial development bank FMO.
All the fundraising events were aimed at funding new MSME loans, as per the startup. Lendingkart reportedly disbursed unsecured loans of INR 2,747 Cr in FY22 as against INR 1,098 Cr in FY21.
The startup, founded in 2014, claims to have disbursed over 1.40 Lakh loans to more than 1.2 Lakh MSMEs across India so far, as per its latest press statement. It has offered loans to MSMEs in over 4,000 cities.
However, the increase in loan disbursals has also led to a sharp rise in its impairment costs. Lendingkart spent a whopping INR 434.7 Cr on provisions and loan write-offs in FY22, equivalent to 70% of its operating revenue. The impairment costs surged over 144% from INR 177.7 Cr in FY21.
The impairment expenditure was also the biggest contributor to its total expenses at 50%. Total expenses rose 65% to INR 89 Cr in FY22 from INR 538.5 Cr in the previous year.
The second biggest contributor to the total expenses was finance cost, which grew 16.7% YoY to INR 238.8 Cr in FY22.
The lending tech startup also saw a 13% increase in its employee benefit expenses during the reported period to INR 71.8 Cr from INR 63.6 Cr in FY21. Lendingkart spent INR 8.8 Cr on employee stock option scheme (ESOPs) in FY22 as against INR 1.3 Cr in the prior fiscal year.
On the other hand, its advertising expenses grew 1.6X to INR 13.1 Cr in FY22 from INR 8.1 Cr in FY21. Legal and professional expenses also increased almost 1.7X to INR 12 Cr in the reported period.
Lendingkart, which has also built machine learning and big data-backed tools that help lenders assess the creditworthiness of borrowers, classifies its business into two segments — finance and platform. While the finance segment represents the loans originated and disbursed on its own balance sheet, the platform segment represents loans disbursed on balance sheets of partners, as per the company’s statement in its regulatory filing.
The platform segment comprises four components — 2gthr, xlr8, cred8, and collec10.
Lendingkart competes with the likes of Indifi, ZestMoney, and Kissht, which reported a consolidated profit of INR 62.6 Cr in FY22, in the broader digital lending segment.
The rise in internet penetration and increasing digitisation has led to the emergence of a large number of digital lending startups which use technology to cater to the needs of the credit-starved MSMEs in the country. As per an Inc42 report, digital lending in India is expected to grow at a CAGR of 22% between 2022 and 2030 to become a $1.3 Tn market by 2030.
