NEW DELHI: Indiagold - a gold-focused digital alternative credit platform - on Friday said it will raise USD 12 million (about Rs 89 crore) in funding.
"Indiagold has agreed to raise USD 12 million funding. PayU and Alpha Wave Incubation (AWI) fund will lead the investment round with participation from Better Tomorrow Ventures, 3one4 Capital, RainmatterCapital, and existing investor Leo Capital," a statement said.
Launched in 2020 by Deepak Abbot and Nitin Misra, Indiagold offers gold-backed loans, gold savings, and gold locker services to over a million consumers in India.
The gold financing business in India is predominantly offline, dominated by the informal segment, which accounts for about 70 per cent of gold loans in India.
These loans address the liquidity needs of Indians without access to unsecured credit, which is availed by less than 10 per cent of the total working population.
The COVID-19 pandemic has accelerated the demand for short-term, low-cost, safe, and easily accessible formal credit options like digital gold loans, the statement said.
"Empowering disruptive fintech entrepreneurs through early-stage investments is a key element of PayU's growth strategy. By supporting businesses that complement our existing portfolio, we aim to achieve our vision of developing a fintech ecosystem that will meet the financial services needs of millions of Indians," Vijay Agicha, Global Head of Strategy and Growth at PayU, said.
Indiagold co-founder Nitin Misra said India offers a USD 650 billion addressable gold loan market, which is highly fragmented and currently dominated by the informal segment, and even the formal segment hasn't adopted digital practices at scale.
"Indiagold's suite of financial products bridges this critical need gap by digitally transforming lending against gold.
We are proud to have the backing of industry-leading growth investors and take it as a reaffirmation of the inherent strength of our value proposition," Indiagold co-founder Deepak Abbot said.
The company is moving aggressively towards its larger vision of establishing gold holdings as an alternate credit score, and creating a gold back credit platform for lenders to provide instant credit against gold, he added.