BENGALURU: Consumer lending start-up MoneyTap has secured capital to the tune of `500 crore in a mix of equity and debt, which will help it fund its planned aggressive expansion into the Indian microfinance market. The equity funding round was led by Aquiline Technology Growth, RTP Global and Sequoia India, alongside a few undisclosed South Korean and Japanese investors. Existing investors Prime Venture Partners and MegaDelta also participated in the round.
According to the company, apart from equity, debt capital has been secured from Vivriti Capital, Credit Saison and others in the form of co-lending and credit lines. The company, founded in September 2015 by Bala Parthasarathy — the former managing partner and founder of Prime Venture Partners — Anuj Kacker and Kunal Varma, targets customers in the 29-31 age group with average incomes of `30,000-`40,000 per month. Focused on offering easy credit access to young professionals, the app offers instant loans ranging from between `15,000 to `5 lakh charging an interest of 15-19 per cent per annum.
The firm is tapping into the largely untapped microfinance market to fuel its growth. Users looking for personal loans can get an approved limit of `5 lakh, but will only be charged interest on the amount they actually use from this corpus. Minimum withdrawal limit has been set at `3,000. The limit is recharged every time the borrower pays back the amount used. The company secured an NBFC licence from the RBI last year and a large portion of the debt raised will be used to kickstart those operations, according to Parthasarathy. The company plans to use the fresh capital raised to scale up operations to over 200 cities, innovate with data-backed lending models and for hiring.
Kacker also says that the firm wants to create reliable data-backed lending models that will determine risk behaviour, alternate credit scores, and creditworthiness of a customer. Investors in the firm add that the Indian market holds significant potential.
“The ever-increasing digitization of India’s economy and financial services industry has created compelling opportunities, particularly for India’s emerging fintech companies,” said Max Chee, Head of Aquiline Technology Growth. “...MoneyTap have successfully balanced growth, profitability and book quality – three of the most important indicators of an enduring fintech business,” added Abheek Anand, Managing Director, Sequoia Capital India.