Reliance Capital Arm Makes $1 Mn Seed Investment In Alternative Digital Lending Startup Billionloans

Reliance Capital has made an investment of $1 Mn (INR 7 Cr) in Bengaluru-based alternative digital lending startup Billionloans. The seed funding round was routed through its wholly-owned subsidiary Reliance Corporate Advisory Services Limited.

The deal was led and structured by Reliance Wealth Management (the wealth management arm of Reliance Capital).

Anmol Ambani, Executive Director, Reliance Capital Ltd said, “Technology and innovation in financial services are going to play a big part in bridging the gap between the aspirations of large number of Indians wanting access to credit on one hand and the ability of companies to build efficient and scalable lending models on the other. We look forward to support Billionloans in their vision and partner in their growth”.

Billionloans was founded by Dr. Rangan Varadan, a serial entrepreneur who has also co-founded MicroGraam, an online micro-lending platform. V Balakrishnan, ex-Board Member at Infosys, Chairman of Exfinity Venture Fund and one of the early investors in the company, is currently the Chairman of Billionloans.

It is a technology-enabled financial services company, active in digital lending landscape. It is focussed on providing flexible and affordable financing options to individuals and small businesses. It connects borrowers to lenders directly.  It uses alternative data-based credit analysis to assess eligibility and process applications.

As stated by Dr. Rangan, “We are integrating diverse data analytic techniques like psychometric analysis and big data, along with user experience focused design to make this happen. We will leverage MicroGraam’s model of building a grassroots partner organization to connect borrowers and lenders.”

With the raised funds, Billionloans aims to focus on providing loans to SMEs and to the individuals for affordable housing, education, and personal loans, etc. To facilitate loans, the company has tie ups with reputed financial institutions and banks to its technology platform. In the next three years, the startup plans to facilitate around $308.7 Mn (INR 2,000 Cr) of loans across multiple products and lenders.

Earlier this week, RBI also finalised its norms for P2P lending in India. The Finance Ministry has also proposed to register these institutions as Non-Banking Financial Companies (NBFC). Post registering as NBFC, these portals will come under the purview of RBI regulations.

As per an October 2016 report released by accountancy firm KPMG and the Cambridge Centre for Alternative Finance, the global P2P lending market is worth $130 Bn. By the end of Q4 2015, the cumulative lending through P2P platforms globally reached 4.4 Bn GBP, according to data released by Peer-to-Peer Finance Association (P2PFA).

Furthermore, as per an IBEF report, the fintech market in India is estimated to double to $2.4 Bn by 2020 from around $1.2 bn at present. Also, the sector has attracted In February 2017, Bengaluru-based online lending platform Capital Float raised about $2.5 Mn (INR 17 Cr) from IFMR Capital Finance and its alternative investment fund. Earlier this month, Pune-based fintech startup EarlySalary raised $4 Mn Series A funding from IDG Ventures India (IDGVI) and Dewan Housing Finance Corp Ltd (DHFL).

Bilionloans currently compete with players such as Faircent, LendBox, Capital Float, Indifi, IndiaMoneyMart, Monexo, Rupaiya Exchange, Capzest and more in the Indian fintech market.