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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.
Previously known as 8finatics, Finomena, was founded in 2015 by a team of IIT and Stanford graduates. Its founding team members include Riddhi Mittal and Abhishek Garg.
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.
Applicants can fill an online loan application in less than three minutes and know the status of their loan within 24 hours. It provides an option to choose the repayment period and a number of monthly installments that meets their monthly budget.
Abhishek Garg, co-founder of Finomena said,
India is a credit-starved country. True financial inclusion will only come by use of mobile technology at mass scale. We believe we can use the power of machine learning algorithms and the digital footprint being created by each person today to evaluate their credit risk more holistically, thereby creating a win-win situation for the entire ecosystem.
He added that they decided to partner with Matrix Partners India as they share the same vision, and will help them in giving a necessary edge to win in the market.Other investments by Matrix Partners include payment gateway
Other investments by Matrix Partners include payment gateway Razorpay, food ordering app TinyOwl, online shopping platform Limeroad, healthcare technology startup Practo and more.
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