Chinese VC firm leads pre-Series A round in fintech startup Smart Coin
Photo Credit: Bhakti Nair/VCCircle

Bengaluru-based fintech startup Smart Coin has raised $2 million (Rs 13 crore) in a pre-Series A funding round led by an undisclosed Chinese venture capital firm.

Seed-stage impact investment firm Accion Venture Lab came on board as a co-investor and existing backer Unicorn India Ventures and fintech accelerator ISME ACE partcipated in the round, a company statement said.

The startup will use the funds to invest in technology and grow its team as it expands its operations, it added.

Smart Coin, which was see funded by Unicorn India in 2017, is a consumer micro-lending platform focused on the underserved middle and lower-income segments in India. It provides small- to mid-sized loans to mobile users.

The company’s loan eligibility and limits are determined on the basis of a customer’s credit score, which takes into account borrower information such as financial profile, social networks and behaviour data. The firm’s proprietary credit underwriting models are based on machine learning and advanced data science.

Operated by SmartCoin Financials Pvt. Ltd, the startup was founded in 2016 by IIT alumni Rohit Garg, the CEO, Amit Chandel, Vinay Kumar Singh and Jayant Upadhyay.

Before starting up Smart Coin, Garg, an alumnus of IIT Kanpur and IIM Ahmedabad, had worked with financial services group Nomura in the UK. Chandel and Singh are both IIT Bombay alumni, while Upadhyay is an alumnus of IIT Delhi. All three were part of the technology team at mobile entertainment firm Kiwi, which develops games for the Android market, before teaming up with Garg to set up Smart Coin.

“We have seen sharp uptick in growth over the past year and have successfully disbursed over 50,000 micro loans. More importantly, we have been able to open credit access for people who were not able to tap the formal channels and were otherwise dependent on personal networks and loan sharks. With this round, we expect to grow the momentum and further scale 10X over the next 6–12 months,” Garg said in the statement.

Accion Venture Lab is a $10 million fund that invests in fintech startups that increase access to, improve the quality of, or reduce the cost of financial services for the underserved at scale, the investment firm’s website states.

ISME ACE is a Mumbai-based fintech-focused accelerator. It operates in a cohort based system and typically invests between $100,000 and $200,000 in startups. It also provides legal services, accounting services, technology advisory, cloud credits and co-working spaces around the country to its startups through various ecosystem partners. For the first batch of its accelerator programme, it had selected six companies namely Artoo, Cashcow, Moneytor, Open Technologies, Smart Coin and Trendlyne.

Mumbai-based venture capital firm Unicorn India Ventures was founded in early 2015 by Anil Joshi and Bhaskar Majumdar. It backs startups in consumer, enterprise, healthcare and deep technology.

Before launching the VC firm, Joshi headed operations at investment networks Mumbai Angels and Bangalore Angels. He has also held positions at Century Rayon, a BK Birla Group Company, and Transasia Bio-Medicals Ltd, maker of diagnostic instruments and reagents.

Last month, it invested in three Kerala-based startups—humanoid developer GenRobotic Innovations Pvt. Ltd, smart kitchen appliances’ maker SectorQube Inc and body-scanning firm Perfectfit Fashion Ltd.

The investments were made from the firm’s first fund, which it launched in 2015 and had 10 startups in its portfolio before the latest transactions. The maiden fund had a target corpus of Rs 150 crore ($23 million in 2015). In December 2015, it hit the first close of its maiden fund at $6 million (Rs 40 crore).

In November last year, it launched its maiden debt fund with a corpus of Rs 600 crore ($93 million).

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