Microlending startup SmartCoin has raised $7 Mn (INR 52 Cr) in a funding round led by LGT Lightstone Aspada. The company’s existing investors Unicorn India Ventures and Accion Venture Lab had also participated in the round.
Unitus Capital acted as a financial partner for this transaction. SmartCoin is planning to use this funding to extend its loan book to another 10 Mn users over the next 12 months, offering INR 1,500 Cr ($200 Mn). Prior to this, SmartCOin had raised $2 Mn in Pre-Series A funding round led by an undisclosed Chinese venture fund. US-based Accion Venture Lab, Unicorn India Ventures and Mumbai-based fintech accelerator ISME ACE also participated in this funding round held back in 2018.
The startup also raised an undisclosed amount of seed funding from Mumbai-based Unicorn India Ventures and other angel investors in April 2017.
Founded in January 2016 by IIT/IIM alumni Rohit Garg, Amit Chandel, Vinay Kumar Singh, and Jayant Upadhyay, SmartCoin is a data-driven, microlending startup that relies on artificial intelligence (AI) and machine learning (ML) tools to disburse loans.
“SmartCoin’s business model has the ability to provide data-driven insights in a customer segment that is otherwise opaque and can unlock means of formal credit and financial services,” Kartik Srivatsa, managing partner, LGT Lightstone Aspada, said.
SmartCoin provides small-ticket personal loans to micro-merchants and self-employed blue or grey collar workers, who are otherwise ignored by large banks, other non-banking financial services (NBFC) and micro-lending institutions.
The Bengaluru-based company’s business model not only improves the credit history of the customer but also allows them to get higher loans later if the initial loan is repaid on time. SmartCoin received its NBFC license last year and has disbursed loans worth INR 400 Cr to date.
Garg highlighted that other financial services institutions choose to ignore the segment because of the lack of formal financial and credit histories, and that’s where SmartCoin’s AI and ML-powered risk assessment engines come into play. The company’s proprietary credit underwriting engine aggregates thousands of data points on the customer’s smartphone, financial transactions, device usage and app activity to build a credit score. Once approved, the loan is transferred digitally to a customer’s bank account, with documentation restricted to Aadhaar card and social media presence.