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Mumbai-based peer-to-peer lending platform LenDenClub has raised an undisclosed amount of angel investment through Venture Catalysts, a seed investment and innovation platform.

Investors that participated in this round include Anirudh Damani, Daud Ali, Narendra Karnavat, Vikas Kapoor, Vikram Lakhotia, Krishna Jhunjhunwaala, and Jayesh Shah.

LenDenClub was founded in 2014 by Bhavin Patel and Dipesh Karki. It currently has over 700 lenders and 1,120 borrowers.

The platform connects borrowers to individual lenders. It uses a combination of traditional and non-traditional data points to validate credit-worthiness of borrowers. The company has an average borrowing of INR 95,000 and charges 1%-3% commission by connecting individual borrowers to lenders.

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Bhavin Patel, co-founder and chief executive, LenDenClub said, “We wanted to bring traditional lending on digital platform. Securing seed funding at such a nascent stage gives us the boost we have been looking for. This will allow us to further improve the platform and reach out to more users.”

The startup will use the newly raised funds to create a strong technology platform and increase its reach to borrowers and lenders.

The peer-to-peer lending space is pegged to become a $4-5 Bn market within the next three to five years as per Venture Catalysts.

“There is a lot of scope for peer to peer lending platform in India. This web based platform for lending business offers good opportunity for growth. Since there are a lot of regulatory & RBI hurdles in this industry, it is considered to be high risk-return investment. To eliminate the risk associated in this segment, there has to be proper solutions in place to keep the regulatory hurdles out,” opines Narendra Karnavat, angel investor at Venture Catalysts.

The loan market in India is growing at 20% every year and is expected to cross INR 21 lakh Cr. by 2016. Out of this, 20% is the unsecured loan segment.

Earlier in February 2016, Bangalore-based peer to peer lending marketplace startup, Loanzen, raised an undisclosed amount of seed funding from Tracxn Labs, and angel investors, through Tracxn Syndicate. Other startups in this segment include KountMoney, Faircent.com, LoanCircle, Capzest, etc.

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