Y Combinator Backed Fintech Startup Bueno Finance Raises $3 Mn

Y Combinator backed fintech startup Bueno Finance has raised $3 million in its seed round from a slew of investors such as Goat Capital, JAM Fund, Olive Tree Capital, Good Water Capital and others from Silicon Valley. Angel investors Kunal Shah, and Anupam Mittal have also participated in the round, the company announced on Tuesday.

The company will use the funds to expand the product offerings and strengthen its team across engineering, product, sales, credit and operations, to support its accelerated growth plans.

The Gurgaon based fintech startup was a part of the YC winter batch of 2021. Founded in 2019 by Saurav Gandhi and Sandeep Arora, the company works towards providing finance solutions to the next billion users in India. By definition, Bueno Finance is a credit focused neobank that caters to the requirements of India’s middle and lower-middle income segment. 

According to Saurav Gandhi, cofounder and CEO, Bueno Finance, only 10% of the formal credit goes to 45% households of India earning approximately $200-$400 a month. “Bueno Finance wants to democratise credit along with other financial services to this massive segment,” added Saurav.

Commenting on the future plans of Bueno Finance, Gandhi said “We are growing very rapidly and plan to acquire multiple partners for customer acquisition. Bueno is partnering with quality employers to fulfill its mission, which ensures a win-win arrangement for the customer and the employer.”

As mentioned earlier, one of the investors of the round was JAM Fund. 

“Bueno finance is accelerating the emergence of the massive middle class in India. I am impressed by Saurav and Sandeep’s depth of understanding of the market dynamics,” said Justin Mateen, cofounder, Tinder. Justin heads JAM Fund, and has deployed $100 Mn in the last year alone. He was ranked the number 1 seed investor in the US and has been an early investor in 18 unicorns.

Another key investor of the round was Goat capital, which was founded by Justin Kan, cofounder, Twitch and Robin Chan in 2020. The venture capital firm handles $100 million under management and has invested in the early stages in companies such as Ginkgo Bioworks, Ramp Financial, Razorpay, Scale.ai, Square, Twitter, Uber, Xendit, and Xiaomi.

The Indian lending tech and fintech startup ecosystem has seen a massive explosion in the last couple of years. With over $2.4 Bn worth of venture capital invested in Indian lending tech startups between 2014 and Q3 2020, the investor outlook towards the sector continues to look bullish.

Additionally, as per Inc42+ estimates, about $11.5 Bn was invested in Indian startups in 2020. Of this, nearly 18.2% of the capital went into fintech firms that raised about $2.1 Bn across 131 deals. Fintech also emerged as the top-funded sector in 2020, followed closely by enterprise tech with $1.7 Bn across 128 deals and consumer services with $1.68 Bn across 95 deals.