Online lending platform ZipLoan has raised Rs 15 crore (about $2 million) in debt funding from Strides Ventures.
This is Strides Ventures’ debut transaction in the digital lending segment, the venture debt firm said in a statement.
“The company [ZipLoan] has exhibited tremendous growth without compromising the quality of the loan book,” said Ishpreet Gandhi, managing partner at Stride Ventures.
ZipLoan’s non-performing assets are less than 3% of its total loan book, said Kshitij Puri, the startup’s co-founder and CEO.
ZipLoan, operated by Delhi-based Blue Jay Finlease Ltd, was launched in 2015 by Puri and Shalabh Singhal. It offers loans of Rs 1 lakh to Rs 5 lakh for a period of six to 24 months to micro, small and medium-sized enterprises.
Puri said MSMEs remain credit-starved but have shown great resilience even during the coronavirus-induced crisis as was evident from the company’s strong collections.
Ziploan has co-lending and debt partnerships with banks and non-banking financial companies such as IDFC First Bank, IndusInd Bank, Northern Arc, MAS Finance and Caspian Finance. It is operational in Delhi-NCR, Mumbai, Indore, Lucknow, Dehradun and Jaipur.
The startup uses an automated credit engine or risk assessment tool called ZipScore to assess the creditworthiness of prospective customers. It also has developed a proprietary loan lifecycle management product which, according to the company, helps it reduce operating costs and bring down the turnaround time to four days from application to disbursal.
ZipLoan had raised Rs 90 crore in its Series B round led by venture capital and growth-equity investment firm SAIF Partners last year. Previously, it secured Rs 20 crore in a funding round led by Matrix Partners India in October 2017.
Prior to that, ZipLoan had raised around Rs 4.2 crore in its pre-Series A funding round led by WaterBridge Ventures.
The firm marked the first close of its debut venture debt fund at Rs 100 crore ($14 million) in December last year.
Its first investment was in Stellapps Technologies Pvt. Ltd, an Internet of Things firm which operates in the dairy segment. Earlier this year, it placed a bet on Mumbai-based refurbished two-wheeler reseller CredR. And last month, it backed business-to-business (B2B) marketplace startup Bulk MRO Industrial Supply Pvt. Ltd.
The venture debt fund's sweet spot for investment will be in the range of $1-2 million and, like most venture debt firms, it will be sector-agnostic, Gandhi had told VCCircle earlier.
Stride Ventures had said it plans to invest in 35-40 startups over the next three years.
The digital lending space has attracted a lot of attention from investors in the recent past.
In April, Bengaluru-based digital lender Capital Float raised $15 million in funding from existing investors including global technology giant Amazon, Sequoia Capital, Ribbit Capital and SAIF Partners.
In March, microlending-focussed SmartCoin Financials Pvt. Ltd mobilised $7 million in a round led by LGT Lightstone Aspada, the India-oriented impact investment arm of LGT Lightstone.
In September last year, digital lending platform LoanTap raised $12 million in a Series B investment round led by Avaana Capital, an Indian venture-growth investment firm.
Development financial institutions have also invested in this segment, with FMO and International Finance Corporation backing non-bank lenders such as Aye Finance and InCred Financial Services.