Saama Capital Leads $4.2 Mn Funding Round In Shubh Loans

Bengaluru-based Datasigns Technologies Pvt Ltd, which runs fintech platform Shubh Loans, has raised $4.2 Mn funding in a round led by venture capital firm Saama Capital.

Existing investors, including SRI Capital, Beenext, and Pravega Ventures, also participated in the round.

With the funding, Shubh Loans plans to expand its customer sourcing platform and invest more in augmenting its technology and credit scoring platform to incorporate the next generation of features.

Founded in 2016 by Monish Anand, Rahul Sekar, Anand Barua, and Tushar Patel, Shubh Loans is a risk platform that forges traditional and non-traditional data to facilitate financial services to those outside the formal credit system.

Kiranbir Nag, Partner at Saama Capital said, “We are excited about partnering with Monish and the rest of the team at Shubh Loans.  We believe that the leadership team’s deep and relevant experience is a strength and a strong differentiator.  In addition, Shubh Loans’ unique customer focus and technology-intensive processing will help the company best maximise the large untapped potential.  We look forward to working with the company as it grows its team, expands it product offering and customer base.”

It enables financial organisations to access new and underserved markets. The startup helps borrowers generate proprietary individual credit score using traditional and secondary data points. It claims that over 60K customers have built their credit scores using the Shubh Loans solution.

Monish Anand, Founder & CEO, Shubh Loans said, “Shubh Loans has always been focused on chartering growth that is sustainable. Fortunately, we have been hitting the right milestones in our journey. Saama Capital has always been at the forefront of investing in FinTech. Their investment in Shubh Loans will strengthen our collective knowledge and expertise in the industry. We are looking forward to a partnership that will propel Shubh Loans to the frontlines of creating a positive impact in the society.”

The company last raised $1.5 Mn in a Pre Series A funding from SRI Capital, BeeNext, and Pravega Ventures. At the time, it planned to expand to 18 new markets and onboard 1 Mn customers in the formal credit domain.

Earlier, in November 2016, Shubh Loans had secured an undisclosed amount of angel funding. The round was led by Sanjai Vohra, former managing director of JP Morgan, and V Bunty Bohra, managing director and India CEO of Goldman Sachs.

Shubh Loans To Offer Loans To Self-Employed Segment

Talking to Livemint, Monish Anand, co-founder, Shubh Loans, said that the end use of its loans is generally for non-discretionary spending such as medical emergencies, education, managing the house, or rental deposits.

Its average loan size currently stands at around $974K (INR 68,000).

He emphasised that Shubh Loans is more comfortable providing loans for revenue-generating activities. Further, the company now plans to start offering credit to self-employed people such as kirana shop-owners and other small shop-owners.

“We will start disbursing loans to the self-employed segment from September. So far, we were doing it through partnerships with other startups, lending to people such as beauticians, carpenters, etc, listed as service providers on their platforms, but now we want to tap the open market,” said Anand.

The company disbursed $5 Mn (INR 35 Cr) in the financial year 2017-18 and is targeting to cross $21.48 Mn (INR 150 Cr) of lending this financial year.

The company claims to record 1,400-1,500 loan applications on an average per day. The company is also planning to apply for an NBFC licence, which will help the startup co-lend with its nine partners.

In the consumer lending space, Shubh Loans competes with the likes of KountMoney, Faircent.com, LoanCircle, Capzest, and Loanzen, among others.

According to a report by Credit Suisse, the global consumer and SME loan market is expected to reach $3 Tn over the next decade, owing to government’s initiatives to provide hassle-free and cashless financial transactions.

Also, the online financial marketplace industry is expected to become a $2.3 Bn market by 2020.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.