LivFin India Pvt. Ltd, a financial technology firm focussed on small and medium enterprises, has raised $5 million (about Rs 35.51 crore) in equity funding from German development finance institution DEG.
This is the first investment by DEG, short for Deutsche Investitions- und Entwicklungsgesellschaft, in India’s fintech segment, New Delhi-based LivFin said in a statement.
LivFin said it will use the capital to expand its operations, as well as increase its assets under management to $40 million by March next year. It will also use the funding to raise additional debt.
The fintech firm is promoted by the family office of Rakesh Malhotra, who has also promoted the SAR Group, which has business interests in energy storage, water purification and the e-mobility sector in the country.
“DEG’s equity investment provides LivFin multiple positives: it’s a validation of our business model and recognition of our rapid growth, our tech-based credit and operations processes, and high governance standards,” company managing director and chief executive officer Rahul Chander said.
He added that the investment also recognised its objectives of being a financier for the un-banked and partially banked segments in the country, and that it will also boost its planned growth over the next 12 to 18 months.
The company – founded in 2017 – says that it has a loan book of over $20 million and that it has so far disbursed over $150 million. LivFin says it has also started its first co-lending structure with a non-banking finance company, where the co-lender provides 80% of funding for a set of borrowers and the fintech firm provides the rest.
Fintech funding deals
There has been heightened interest in the financial technology segment over the past few years, with several startups seeking to formalise unstructured portions of the economy and bring technology-backed financial services to underserved and unserved segments of India’s populace.
In one of the biggest funding rounds for a fintech venture this year, FreeCharge founder Kunal Shah’s Cred raised $120 million (Rs 862 crore) in August.
NiYO Solutions, a neo-bank, received $35 million in a Series B funding round from several investors, including Chinese conglomerate Tencent. In September, digital banking firm Yelo raised seed funding in a round led by multi-stage investor Matrix Partners India.
In June, Tiger Global led a Rs 210 crore Series B funding round in Bengaluru-based Open, which provides collection and payout automation services for small businesses.