True Balance Raises $15 Mn For Its NBFC Arm In Debt Funding

SUMMARY

True Balance India has now raised a total of $25 Mn in debt fund

The current round saw participation from Pace, E-clear, and others investors in Korea

True Balance — the NBFC operated by Balance Hero— focuses on providing loans to people within the monthly income bracket of INR 5 K to INR 30 K

True Balance India, an RBI-licensed NBFC operated by Balancehero India, the wholly-owned subsidiary of Balancehero, Korea, has raised $15 Mn in debt funding from Pace, E-clear, and other investors in Korea, to support the company’s expansion in India.

The startup’s current funding comes at the heels of its first round of debt funding in March 2021, wherein it raised $10 Mn from Northern Arc for the NBFC arm. This takes the total debt fund raised to $25 Mn.

Established in 2019 by Cheolwon ‘Charlie’ Lee and Jay Lee, True Balance focuses on non-online payment users, and non-credit score users that are underbanked or not serviced by the traditional financial institutions.

True Balance claims to have a 30-50% growth on a month-on-month. According to the startup, its key product to new-to-credit users — Level Up Loan — has grown 2000% in FY21 for small ticket size products. The company aims to cater to customers within the monthly income bracket of INR 5 K to INR 30 K with loans between INR 1 K to INR 50 K.

With the onset of the pandemic, more and more startups are opting for venture debt funding. Between 2019 and 2020, investments in venture debt have grown by nearly 79%. Out of the 154 deals in 2020, ecommerce (30), consumer service (29), and fintech (27) were the most active sectors for venture debt funding.

As the brand raises this round, Vishal Bhatia, chief financial officer, True Balance, said, “Every round of funding we raise only cements our commitment to ensuring access to finance for the underbanked, and those who lack access to credit. We have seen exponential growth this year and are confident of achieving a break-even within the year. The goal with this round of funding is to expand our great work to newer markets, making finance available for all.”

True Balance aims to break even within FY2021 with its proprietary alternative credit scoring system (ACS) and machine learning-based underwriting models that support NTC and low-credit score users in getting access to liquidity.

In 2019, it also launched its financial product, True Credits, which the startup claims has 1 Mn transactions in just three months. Besides, True Balance affirms to have disbursed more than INR 300 Cr across the nation, and loans in the range of INR 1 K to 50 K have been given to more than 6.7 Mn Indians.