Mumbai-based FinTech startup LoanTap has raised $3 Mn in Series A funding round. The investment was led by HNI’s Dr. Abhishek Pandey and Jaysukh Sapra.
The funds raised in this round will be utilised by the startup to expand its operations in NCR, Mumbai Metropolitan Region, Pune and Bengaluru. Further, the funds will also be utilised to create end-user specific products and deliver them directly to retail customers.
As mentioned in a press statement, nearly 85% of the funding will be used for onward lending by the platform, while a part of the remaining capital will also be used to augment its technology and distribution frameworks.
LoanTap was launched in early 2016 by Satyam Kumar and Vikas Kumar. It follows an agency-based collection model and allows professionals to make flexible single and bulk payments in a cost-effective way.
One can avail from a list of products from regular EMI-based loans, to EMI free loans, to personal line of credit. Borrowers can also choose custom-made loan products like overdraft facility, credit card takeover loans, rental security deposit loans, advance salary loans, and consumer durable loans.
The loans are disbursed directly through its in-house RBI-registered NBFC to ensure a transparent pricing structure. This differentiates the platform from others who majorly work as an aggregator in this space.
In its first phase, it laid its focus on the low delinquency salaried segment, characterised by a job experience of merely 2-5 years. As of now, loans are given for a period of 15 days to 5 years.
The founders are currently exclusively focussed on the upwardly-mobile salaried professionals and eventually aim to tap into the MSME sector. It further aims to increase average loan size to $9K (INR 6 Lakhs) from $6K (INR 4 Lakhs) and reach a book size of $111 Mn (INR 750 Cr) in next 3 years.