Bengaluru-based logistics financing startup Loanzen, on November 23, announced that it raised an undisclosed amount from Zephyr Peacock India Growth Fund, which focuses on small and medium enterprises (SME) in India. Early-stage investor Kae Capital also invested in the round.
Through this investment, Loanzen plans to enhance its technological capabilities and building its analytics team. The company will focus on scaling up its operation in Karnataka and expansion into other markets in South India as well.
Moreover, Loanzen is also planning to target additional 75-80 Cr “loan book addressing a base of over 2,000 customers in the coming year,” the cofounder Madhu Sudhan, said in a press release.
Previously, the company had also raised funding from Tracxn Labs, and angel investors through Tracxn Syndicate back in 2016.
Founded in September 2015 by Madhu Sudhan, Ritesh Kadmawala and Venkatesh Sankararaman, Loanzen launched operations in January 2016. The company provides loans to drivers and vehicle operators — who have trouble getting loans from other lenders due to inadequate credit history and lack of documented income — to buy used commercial vehicles.
Sudhan also added, “We at Loanzen have been focusing on enabling micro-entrepreneurs in the logistics segment scale their business with both digital tools and capital. Given the rapid growth in the logistics segment with increasing penetration of technology, we are looking to scale up over the coming year.”
Loanzen has reportedly provided loans of INR 1 Lakh to10 Lakh to over 500 individuals. The company also claimed to have helped the customers double their income. In total, the fintech enables its customers to generate an additional income of over INR 260 Mn each year, Loanzen said in a press release.
Abhijeet Kudva, Managing Director at Zephyr Peacock, said that the company is expected to become a “leader in logistics financing” by supporting over 15,000 customers in the next three to five years.
Digital Lending Gaining Traction India
According to the Global Fintech Adoption Index 2019 report by EY, India witnessed an 87% growth in terms of fintech adoption, making itself the second-largest in the world. This means that at least 87% of consumers in India are aware of money transfer and mobile payment platforms and standards. This is why fintech companies are much more excited about Tier 2 and Tier 3, and niche sections.
DataLabs by Inc42 also noted that the transformation of the fintech landscape in India from being payment centric to other verticals — like lending tech and insurance tech — has acted as a catalyst in the context of fintech awareness among the informal sectors of the Indian economy.
Besides Loanzen, some other such startups in the lending segment include Gujarat-based LendingKart, New Delhi-based CashSuvidha and Bengaluru-based Zest Money.