CIIE's Bharat Inclusion Initiative strikes maiden deal in fin-tech startup Kaleidofin
Photo Credit: Shah Junaid/VCCircle

Bharat Inclusion Initiative, the seed fund set up by IIM Ahmedabad’s Centre for Innovation Incubation and Entrepreneurship (CIIE), has invested an undisclosed sum in financial technology platform Kaleidofin, a company statement said. 

This is the first investment made by the $25-million (Rs 169 crore) fund, which counts the Bill and Melinda Gates Foundation, the Michael and Susan Dell Foundation, Omidyar Network and Tata Trusts as its investors.

The Chennai-based startup was founded in 2017 by the former chief executive and chief financial officer of IFMR Holdings Sucharita Mukherjee and Puneet Gupta, respectively. The platform provides tailored solutions to under-banked customers to meet their financial goals. In April, Kaleidofin had raised $2.8 million (Rs 18 crore) from Omidyar Network, Blume Ventures and Israeli serial entrepreneur, Shlomo Ben-Haim.

“We believe that everyone needs financial solutions that are intuitive, easy to use, flexible and personalised to real goals of individuals. Kaleidofin’s quest to service this need is further strengthened by the addition of Bharat Inclusion Initiative as an investor,” co-founder Gupta said in the statement.  

Kaleidofin Pvt. Ltd assesses the risk profile of low-income households and uses machine learning algorithms to suggest the appropriate financial investment for the customer on its mobile app. 

On the lending side, Kaleidofin partners with non-banking finance companies (NBFCs) like SEWA Bank, Sonata Microfinance, ICICI Pru MF, Aaaditya Birla, SBI and Bharti AXA. The platform uses India stack solutions for eKYC, eSign and electronic national automated clearing house (eNACH) on its platform to integrate the customers with the lenders. The company has operations in Tamil Nadu, Rajasthan, Gujarat, Maharashtra, Uttar Pradesh and Bihar.

Bharat Inclusion Initiative

The $25-million fund invests in social-impact startups and also mentors them over a period of 3-4 years across areas such as financial inclusion, livelihood, education and health.

The Bill and Melinda Gates Foundation, the Michael and Susan Dell Foundation, Omidyar Network and Tata Trusts have made an initial commitment of $12.5 million. This includes $5 million that will go towards accelerator programmes, research, workshops and partnerships.

The remaining amount will go for the Bharat Inclusion Seed Fund, which will invest in seed and pre-Series A startups. The seed fund has marked its initial closing at $7.5 million and aims to make a final close at $15 million by July.

Deals in the space

In 2017, funding into India's fin-tech sector increased four times touching $1.84 billion from $447 million in 2016, data from VCCEdge, the research arm of News Corp VCCircle, showed.

The trend seems to be continuing in 2018 as well, as the segment has attracted considerable investor interest in the past few months.

The most recent deals in the space include online lending platform Paysense, which in July raised $18 million (Rs 123.88 crore) in a Series B funding round led by Naspers-owned PayU.

Early last month, Matrix Partners invests $1.5 million (Rs 10 crore) in LiquiLoans, a lending platform founded by Gautam Adukia and Achal Mittal, two of the four co-founders of home appliances and furniture rental marketplace RentoMojo.

In June, digital lending platform SMEcorner, investment app Sqrrl, domestic remittance provider for low income groups Eko India Financial Services and online insurance selling platform PolicyBazaar secured angel and venture capital funding.

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