Sistema Asia Fund, Others Invest $10.9 Mn In SME Lending Platform Lendingkart

Ahmedabad-based SME lending platform Lendingkart Technologies has raised $10.9 Mn (INR 70 Cr) funding round, in the form of equity funds from Sistema Asia Fund, others. Existing investors Bertelsmann India Investment, Mayfield India, Saama Capital, India Quotient and Darrin Capital Management also participated in this round.

The latest round of funding will enable the company to increase its loan book and strengthen its technology & analytics capabilities. Additionally, the company will utilise the funds to expand reach to the underserved markets.

Dhruv Kapoor, Managing Director, Sistema Asia Fund Advisory said, “Lendingkart’s data science-driven approach and contactless distribution model is the answer to the needs of the SME sector overlooked by traditional banking infrastructure. We are privileged to join a world class team and an esteemed group of investors in fostering our collective vision of financial and digital inclusion.”

Sistema Asia Fund is managed by Russian Conglomerate Sistema JSFC. Sistema JSFC had floated a proprietary $50 Mn (INR 340 Cr) Asia Fund in February 2016, to support Indian startups operating in the technology and niche consumer retail segments.

Lendingkart – Banking On SME Lending

Founded in 2014 by ex-banker Harshvardhan Lunia and former ISRO scientist Mukul Sachan, Lendingkart is an instant working capital finance platform that provides SMEs with easy access to credit.

Talking about the startup, Pankaj Makkar, Managing Director, Bertelsmann India Investments said, “Digital lending is at an inflection point where technology and big data can help innovate on creating touchless credit evaluation and distribution leading to access to capital to the SME sector across the country.”

The recent round of funding takes Lendingkart’s total funding since inception to about $83 Mn (INR 534 Cr). As per a company statement, the funding is a combination of equity $37.8 Mn (INR 243 Cr) and debt of about $45.3 Mn (INR 291 Cr).

At present, the company focusses on providing short-term loans with small-ticket sizes. Lendingkart offers easy collateral-free loans with minimal paperwork. The company claims that once the evaluation process is completed, the loan amount is disbursed to the qualifying borrower within 72 hours from the time of application.

Since inception, Lendingkart Finance has extended its reach to over 720 cities in India across 29 states and seven union territories. Till date, the startup claims over 300K SMEs have reached out to Lendingkart Finance for their credit requirement and 10,000+ SMEs have already received funds.

As per a Nasscom report, the Indian fintech software market is forecasted to touch $2.4 Bn by 2020, from the current $1.2 Bn. According to Inc42 Datalabs, fintech startups attracted the highest number of funding deals in H1 2017. Total investment made in this segment during the period stood at $2 Bn. An emerging domain within the fintech sector is alternative SME lending. Other startups in this segment that compete with Lendingkart include Quikrupee, SMEcorner, Innoviti, Biz2credit, smehelpline and smegetmoney. The recent round led by Sistema Asia Fund will hopefully allow Lendingkart to focus on its expansion plan and maintain its loan book with ease.