The startup plans to use the funds in strengthening its core technology
The funds will also enable the company to hire leadership
The startup aims to provide unsecured personal loans while keeping low default rates
Bengaluru-based lending startup MoneyOnClick has raised $2.15 Mn (INR 15 Cr) in a seed funding round led by venture capital firms Orios Venture Partners, Kalaari Capital, and 3one4 Capital.
The startup plans to use the funds to strengthen its core technology with a machine-learning based credit underwriting and risk assessment platform. The funds will also enable the company to hire leadership and operations teams.
The startup, which is currently in stealth mode, is using advanced ML/AI based underwriting and in-house technology platform, to provide unsecured personal loans to Tier 2 and Tier 3 customers while keeping very low default rates.
According to Inc42’s Indian Tech Startup Funding Report 2018, fintech startups raked $1.4 Bn in funding across 121 deals last year. Inc42 DataLabs noted that 2018 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.
It is to be noted that Indian retail lending is expected to touch $1.3 Tn by 2025 and unsecured personal loans are expected to be around $200 Bn. The next generation of fintech startups has been focused on changing the course of loans in the country, by bringing their services to an untapped, underserved population of India in Tier 2 and Tier 3 markets.
Earlier, talking about expectations of fintech market in 2019, Sanjay Swamy, managing partner, Prime Venture Partners, told Inc42 that the three categories of fintech startups — marketplace, cooperation with banks, and the NBFC model — will continue to grow in the coming year as financial services are very important in India.
He added that the market is always either underserved or unserved, and since India is a huge market, there are ever-increasing solutions for newer users coming online. He emphasised that the day of one-size-fits-all is gone and that the focus is shifting to targeted solutions for micro-segments.