Mumbai-based InfoCredit Services Pvt. Ltd, which operates credit scoring platform CreditVidya, has raised $5 million (Rs 32 crore) in a fresh round of funding led by Matrix Partners, the company said.
Existing investor Kalaari Capital, which had invested $2 million in June 2016, has also participated in the round. While Matrix put in Rs 23.81 crore, Kalaari accounted for the rest.
The company will use the money to add a wide range of anti-fraud and verification services to its existing big data underwriting platform, besides improving its AI-based credit underwriting algorithms that use over 10,000 data points for risk assessment, the company said in a press note.
As a part of this transaction, InfoCredit issued 5,951 Series B compulsorily convertible cumulative preference shares and 100 equity shares to the investors, show documents with Ministry of Corporate Affairs.
The subscription price of the preferential shares was Rs 51, 601 apiece, including a premium of Rs 51,501. The equity shares, which were entirely allocated to Matrix, were also subscribed at the same price, but on a premium of Rs 51,591.
According to Vikram Vaidyanathan, managing director, Matrix Partners, growth opportunities for CreditVidya are immense. “Every bank and NBFC has now embraced technology-based sourcing and underwriting to help bridge the credit gap for first-time borrowers.”
CreditVidya was founded in 2013 by former Experian Credit Information Company India Pvt. Ltd executives Abhishek Aggarwal and Rajiv Raj. Raj also had stints in Credit Information Bureau (India) Ltd and HDFC Bank.
“By leveraging India Stack, we have managed to reduce the cost of underwriting for a small ticket loan by over 50% and reduced the turnaround time for loan disbursal from several days to under 30 minutes,” said Agarwal, the company’s co-founder and CEO.
The startup uses non-traditional data sources to assess the creditworthiness of individuals seeking loans, and charges lenders for each customer. CreditVidya leverages big data analysis for credit underwriting, and helps its customers assess borrowers, especially first time borrowers, more accurately. The company claims to have assessed over five million potential borrowers till date.
The company counts Bajaj Finance, Capital First, Fullerton India, Tata Capital, Aditya Birla Finance, TVS Credit Services, RBL Bank, IndusInd Bank, InCred and IIFL, as its clientele.
The fintech sector has been receiving considerable investor interest over the past few months. A VCCircle analysis had showed that since January, more than 25 fintech startups have raised funds from venture capital investors across the payments, digital lending, personal finance and payment gateway space, and the number is growing.
In July, Monsoon CreditTech Technologies Pvt. Ltd, a stealth mode startup in the credit scoring space, had raised an undisclosed sum from angel investors Sunil Kalra and Aditya Singh, former senior Microsoft executive Rishi Srivastava, and Google India’s Rajan Anandan, among others.
The same month saw Bengaluru-based fintech firm Innoviti Payment Solutions Pvt. Ltd raising $18 million in a Series B round led by the SBI-FMO Fund, Bessemer Venture Partners LP, and existing investor Catamaran Ventures.
Between February and March, Gurgaon-based Protinus Infotech Pvt. Ltd, which operates payment platform Trupay, had raised Rs 4.5 crore ($700,000) from a clutch of investors, including Kae Capital.
Last month, online peer-to-peer lending platform LoanMeet, which is run by Strivers Solutions Pvt. Ltd, had raised an undisclosed amount of seed funding.