Matrix Partners Leads $1.8 Mn Pre-Series A Round In Liquiloans

Mumbai-based peer-to-peer lending startup Liquiloans has raised $1.68 Mn (INR 12 Cr) in a Pre-Series A round led by Matrix Partners, with the participation of investors like Freecharge founder Kunal Shah, Renaissance Group chairman Abhishek Dalmia and Jitendra Panjabi.

The company plans to use the fresh funds to establish itself as a trusted brand and build credibility in the market as a new P2P player.

Rentomojo buddies Gautam Adkia and Achal Mittal launched Liquiloans in 2018 to offer instant loans to consumers in the P2P lending format. The startup is focusing on prime customers, without going into the risky category of underserved or unserved borrowers.

Mittal reportedly said that the company will never promise lenders a huge rate of interest as returns, but rather offer consistent returns. It offers personal loans, consumer loans and deposit financing and claims to have 0% EMI products and competitive subvention rates.

The company claims to make sure the amount is disbursed within 24 hours of its approval.

The Indian P2P lending industry witnessed a sudden boom in 2017, facilitated by the fintech revolution.

Expected to hit the $4 Bn-$5 Bn mark by 2023, the Indian P2P lending space has players like LendBox, LenDenClub, IndiaMoneyMart, Monexo, Rupaiya Exchange, LoanBaba, CapZest, and i2iFunding.

RBI Stance On P2P Lending

Earlier in October 2017, the RBI released a list of directives pertaining to the registration and operation of NBFC-P2Ps in a draft entitled Non-Banking Financial Company – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017.

In its new guidelines, the RBI mandated a INR 2 Cr ($307K) capital requirement for all P2P lending companies in a bid to ensure that lending platforms have enough “economic skin” in the game. Additionally, these companies must ensure that the aggregate exposure of a lender to all borrowers at any point in time across all P2Ps does not exceed INR 10 Lakh ($15,351).

Similarly, the country’s central banking institution also placed a cap of INR 10 Lakh ($15,351) on the total amount that can be borrowed at any point in time across all P2Ps. Further, a single investor is allowed to lend only INR 50K ($767.5) at a time.

With a 25 people team, Liquiloans is hoping for removal of regulatory limitations such as limitation of INR 10 Lakh on the total amount that can be lent and borrowed so that it can expand its business rapidly.

According to the ‘Indian Tech Startup Funding Report 2018’, the country saw 121 fintech deals in 2018 worth about $1.4 Bn. According to the report, last year saw a sharp decline of 51.66% in the amount invested in fintech startups as compared to 2017, which is an indication of saturation in the Indian fintech sector, where licensing is going to be a decisive factor for VC investments in startups.

[The development was reported by ET.]