Consumer lending startup EzCred bags $1 mn seed funding

Bangalore-based EzCred Private Limited, which operates a consumer lending platform, has raised Rs 6.5 crore ($1 million) in a seed round of funding from a clutch of investors, a top company executive told VCCircle.

The investors who backed the firm are a mix of financial services and technology veterans, including Dheeraj Pandey, the chief executive of enterprise cloud firm Nutanix; Rajesh Yohannan, former managing director at financial services multinational Citibank; and Akash Garg, director of engineering at cab hailing firm Uber.

Others who also participated in the round include Sanjay Nambiar, head of Asia-Pacific for strategy, cards and personal loans at Citibank; Christian Oestlien, director of product management at video sharing website YouTube; Ratikant Sahu, head of digital delivery at banking firm ANZ; and Neill Occhiogrosso, partner at US-based venture capital firm Costanoa Ventures.

In January, VCCircle had exclusively reported the launch of EzCred. The startup, founded by Zephyr Peacock India's former managing director Sachin Maheshwari and ZipDial co-founder Amiya Pathak, went live in February.

The firm will primarily use the funds to ramp up its technology infrastructure and team, CEO Maheshwari told VCCircle, confirming the development. The current funding round gives the company an 18-month runway, following which it will hit the market for its Series A round.

EzCred offers consumers loans for purchases at offline retailers. However, unlike traditional consumer finance firms, the company uses Aadhar, eKYC and biometric-enabled authentication to process and disburse loans, avoiding paperwork.

“If one is looking to solve the problem of credit for the masses, offline is the way to go as you don’t restrict yourself to just a limited consumer segment and demographic. Besides, 95% of the global retail transactions still happen offline and this would also include a lot of consumers who are outside the online credit score systems,” Maheshwari explained.

An alumnus of IIT Kanpur and Wharton Business School, Maheshwari has also served at VC firm Draper Fisher Jurvetson and Opus Capital. Co-founder and chief operating officer Pathak is an IIT Kanpur and IIM-Calcutta alumnus, and his mobile-based marketing platform Zipdial was acquired by Twitter.

EzCred started its operations with financing consumer durables, and currently focuses on mobile phone purchases. “Origination of loans for this category has to be very cost-efficient as the ticket size is usually lower [here],” said Maheshwari.

The company has struck a partnership with Noida-based tech distribution company YMS Mobitech Private Limited, which is present in 300 cities and will help EzCred showcase its financing options at offline retail outlets.

It has tied up with four lenders, including banks and non-banking financial companies whose names Maheshwari refused to disclose. The company is in talks with more lending partners.

In the current financial year, the company plans to foray into more consumer durable categories and diversify into travel and healthcare. Besides, it is looking to build a credit and fraud model.

Recent deals in the fin-tech space include Mumbai-based loan startup Paysense, which raised $5.3 million (Rs 34 crore) in Series A funding from Jungle Ventures, Naspers and existing investor Nexus Venture Partners.

Last month, Ahmedabad-based Lendingkart, a lending firm for small and medium enterprises, raised $4.6 million from Anicut Capital LLP. In the same month, Bangalore-based lending firm Capital Float raised $2.3 million (Rs 15 crore) from Mahindra & Mahindra Ltd’s non-banking finance company.

In March, Mumbai-based SME and consumer lending platform InCred Finance raised Rs 25 crore from private equity firm Paragon Partners.

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