Bangalore-based fintech startup Finomena has raised an undisclosed amount of funding from venture capital fund Matrix Partners.
Other investors who participated in this round include Kaushal Aggarwal, MD and co-founder of Avendus and Harshvardhan Chamria from Magma Fincorp Ltd, along with other entrepreneurs and angels.
The Idea To Startup
The founders did their research and found that about 20% in the top line had access to financial services, while 20% in the bottom line could also be financially helped due to the presence of MicroFinance industry. However, it’s the middle 60%, who form a massive chunk of college students, young working professionals, freelancers, or self-employed individuals, who are left untouched by most banks and NBFC’s.
In a blog, Riddhi Mittal, co-founder of Finomena, says that this 60% of the population would be rejected for loans outright because they have no income or credit history. So the entire process has to be re-thought end-to-end from first-principles to be non-traditional and technology-first. Technology has to deeply disrupt every stage, so that disbursing loans at scale for such small amounts becomes viable.
Finomena uses alternate data sources and proprietary algorithms to evaluate credit-worthiness of borrowers to enable them to purchase aspirational phones, laptops and other consumer electronics online by opting for easy instalments or financing options.