Alteria Capital has extended Rs 80 crore ($11.5 million) to digital lending startup Lendingkart, in the largest venture debt cheque written to an Indian company since Innoven Capital provided Rs 100 crore to travel portal Yatra around two years ago.
The fresh capital will help Lendingkart service micro, small and medium enterprises (MSMEs) across the country and bring them into the financial mainstream, co-founder and CEO Harshvardhan Lunia said.
The venture debt funding to Lendingkart comes at a time when investors have been cautious in providing capital to lending startups in view of the liquidity crunch faced by non-banking finance companies (NBFCs) triggered by the IL&FS crisis last year.
However, some argue that this is the right time for investors to get into the segment.
“The last few quarters have witnessed a lot of volatility in the NBFC space. But companies which have robust underwriting platforms and a strong equity cushion have been able to turn this into a growth opportunity," said Vinod Murali, managing partner, Alteria. “While liquidity has not been easily available for the broader market, Lendingkart has grown sharply during this phase.”
Lendingkart had last raised equity funding in February 2018. It had received Rs 565 crore ($87 million) in a Series C round of funding led by Singapore’s Fullerton Financial Holdings Pte Ltd. Existing investors Sistema Asia Fund, Bertelsmann India Investment, Mayfield India, India Quotient and Saama Capital had also participated in the round.
The round had taken the total funds, equity and debt, raised by Lendingkart Group to more than $173 million (Rs 1,129 crore).
Lendingkart Group was founded in 2014 by Lunia and Mukul Sachan. It operates two entities – Lendingkart Technologies Pvt. Ltd and Lendingkart Finance, which was formerly known as Aadri Infin Ltd.
Despite the fallout of the IL&FS crisis, digital lending startups have been getting funding. In April, ZestMoney raised $20 million in a Series B round led by venture capital firm Quona Capital while Progcap, which provides debt to micro and small businesses, raised $1 million in a round led by early-stage investment firm GrowX Ventures.
Alteria Capital also provided venture debt to ZestMoney earlier this year.
The venture debt firm was founded in 2017 by Murali and Ajay Hattangdi, who were former top executives at venture debt provider InnoVen Capital.
In October last year, it hit the second close of its debut fund at Rs 625 crore ($85 million). The fund seeks to raise Rs 800 crore with a greenshoe option to mop up another Rs 200 crore.
The venture debt firm had made its first investment in ready-to-cook food startup Fingerlix. It followed this up with investments in Sachin Tendulkar-backed celebrity fashion firm Universal Sportsbiz Pvt. Ltd, Mumbai-based ed-tech startup Toppr Technologies Pvt. Ltd and home healthcare services Portea.
Its other investments include Delhi-based student accommodation platform Stanza Living, scooter sharing startup Vogo and Rebel Foods, an internet kitchen platform that owns and operates a number of brands including Faasos and Behrouz Biryani.