Lendingtech Startup Yellow Metal Bags Funding To Improve Gold Credit Offerings

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Update| March 15, 2023, 12:13 PM

Yellow Metal has raised $3 Mn in a seed funding round led by VC firm MSA Novo. Spiral Ventures, WaterBridge Ventures and Java Capital also participated in the funding round. 

Yellow Metal will use the fresh funds to expand its technology team operations across Karnataka and create new forms of asset-backed lending services. It will also use the fund in strengthening its loan management system, to help improve customer experience.  

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Gold lendingtech startup Yellow Metal has reportedly secured more than $3 Mn (INR 24.6 Cr) in its seed funding round led by MSA Capital. 

WaterBridge Ventures, Spiral Ventures, LetsVenture’s LV Angel Fund and Java Capital’s Csquare Venture Partners Fund also have participated in the funding round. 

According to regulatory filings, Yellow Metal issued one equity share and 3,662 Seed I compulsory convertible preference shares (CCPS) at a price of INR Rs 67,773 apiece to raise $3.02 Mn. 

MSA Capital invested INR 9.92 Cr in the startup whilst WaterBridge Ventures, Spiral Ventures, LetsVenture, and Java Capital infused INR 7.20 Cr, INR 6.20 Cr, INR 80 Lakh and INR 70 Lakh respectively in the startup.

Founded in 2020 by Rahul Boggaram and Nikhil Boggaram, the startup offers gold credit to rural people within 30 minutes. It charges an interest rate of 9.48% annually on gold loans, according to its website.

In November, the startup launched an ESOP pool worth INR10 Cr and issued 1,465 stock options to its employees. It has raised $3.53 Mn funding so far. 

In the financial year 2021-22 (FY22), it clocked a loss of INR 62.8 Lakh. Its total income stood at INR 6.34 Lakh while its operating revenue was INR 1.6 Lakh in the corresponding fiscal year.

In India, it faces competition from the likes of Indiagold, Rupeek, Bold Finance and Jar, among others. 

According to an Inc42 report, the country’s fintech market is anticipated to cross the $1.3 Tn mark by 2025. Of this, lendingtech, which is a subsector of the fintech industry, will capture $616 Bn of the entire market by 2025 and expand at a CAGR of 32% during 2022-25. 

In November, gold lending startup Indiagold raised $22 Mn in Series A funding round from Alpha Wave, 3one4 Capital, PayU, and Leo Capital. 

During the same month, fintech startup Bold Finance secured $1.5 Mn in a seed funding round led by Kae Capital. Existing investors Antler India, Nitin Gupta from Uni Cards, Ishpreet Gandhi from Stride Venture, Shashikant Dola from McKinsey, Tushar Mehndiratta from Avail Finance, Vadiraj Kulkarni from ITC PSPD, among others also participated in the funding round.

The development was first reported by Entrackr