Lending Startup Loantap Raises $8 Mn From 3one4 Capital And Existing Investors

Pune-based online lending startup LoanTap has raised $8 Mn (INR 57.9 Cr) from a combination of debt and equity for its fifth funding round which was led by Bengaluru-based early stage venture capital fund 3one4 Capital.

The startup’s existing investors including, Shunwei Capital, Kae Capital, India Quotient, Tuscan Ventures and angel investor Ashish Goenka, also participated in this round.

LoanTap was founded in 2016 by Vikas Kumar and Satyam Kumar and it offers flexible loan products to salaried professionals. It also offers EMI free loans, personal overdraft, rental deposit loans and credit card takeover loans which focus on monthly cash outflow of salaried professionals.

LoanTap is registered as LoanTap Credit Products Pvt Ltd with the RBI. It operates as an NBFC which offers unique products and features within the regulatory guidelines and ensures a fully transparent pricing structure.

According to the startup, the customised loans offered by them are designed to match the instant consumption patterns of the millennials. The startup claims to use the latest technologies for the loaning process such as loan application, creditworthiness assessment and disbursal mechanism, to help users get faster access to credit.

LoanTap had become profitable within the first five quarters of its operation and its loan book is growing at 12% on monthly basis.

Speaking to Inc42, LoanTap founder Satyam Kumar said that the startup has almost used over 95% of its last funding for onward lending so this raise is essential for the further creation of its loan book.

Prior to this round, LoanTap had raised $6.25 Mn (INR 44 Cr) in an equity funding round led by Beijing-based venture capital firm Shunwei Capital in July 2018. It had raised $4 Mn (INR 28.4 Cr) Mn Series B funding  Kae Capital, India Quotient, IFMR, and MAS Financial Services Ltd in 2017 and $3 Mn (INR 21.3 Cr) in Series A funding in 2016.

Satyam Kumar also added that with this raise, they will also look to develop their technology as only about 5% of the previous funding is remaining for further developments.

According to a BCG report, the country’s digital lending market has the potential to become a $1 Tn ( INR 71 Lakh Cr) opportunity in the next five years.

Recently, Bengaluru-based digital lending startup ZestMoney had raised an undisclosed amount in a venture debt funding from Indian venture debt fund Alteria Capital.

This month, fintech lending company Aye Finance had raised $10 Mn (INR 71.1 Cr) in a debt funding round from global impact investment manager, responsAbility and Northern Arc.

According to the ‘Indian Tech Startup Funding Report 2018’, fintech emerged as the top sector in terms of the number of deals which stood at 121 and reported an investment of $1.4 Bn (INR 9, 957 Cr).