LoanTap Financial Technologies Pvt. Ltd, an online platform that offers loans and overdraft products to salaried professionals, has raised around $4 million (Rs 26 crore) in equity and debt.
The equity infusion of Rs 10 crore was led by early-stage investment firm Kae Capital with participation from existing investors including India Quotient and some wealthy individuals, the company said in its statement. The debt capital was raised from IFMR and MAS Financial Services Ltd.
The company will use the funding to grow its loan book, bolster collection features in its software and expand to smaller cities and towns.
In August last year, LoanTap had secured $3 million (Rs 20 crore) from Mumbai-based affluent individuals Abhishek Pandey and Jaysukh Sapra to fund its operations.
However, a filing with the Registrar of Companies showed that the company had raised about Rs 1 crore from India Quotient and around Rs 60 lakh from Pandey.
LoanTap founder Satyam Kumar explained that last year’s fundraising round was also a mix of debt and equity and that the RoC filing reflects only the equity portion. The debt component included Rs 3 crore from Pandey, he said.
“Even in the new fundraising round, the capital structure won’t reflect the actual amount,” he said.
Kumar also said that while LoanTap runs the technology platform, the loans are disbursed through in-house non-banking finance company Lotus Sree Filco Pvt Ltd.
“I already have a loan book of $2 million. Had I not raised $3 million, I would not have made a book of $2 million and spent on acquiring licences,” he said.
LoanTap was established in May last year by Satyam and Vikas Kumar. Satyam has 17 years of experience in the loans business, having worked with IndusInd Bank, Deutsche Postbank, ICICI Bank and ICI India, where he has built teams, designed products and built distribution channels.
Vikas, who is also chief technology officer at LoanTap, has 16 years of experience in the software industry. Between 2000 and 2010, he founded and exited Brainvisa, a Pune-based e-learning firm. He is also an investor in various startups such as Unbxd, Mobikon Technologies and Dogspot.in. He also advises startups on technology and strategy and is part of the Indian Angel Network.
LoanTap has its headquarters in Mumbai and a back office in Pune. It follows an agency-based collection model and caters to the low-delinquency salaried segment with job experience of two to five years.
The startup intends to deepen its presence in the salaried segment and eventually lend to small and medium-sized businesses with an average loan size of Rs 2 lakh by expanding to the top 10 cities of the country.
The firm plans to expand to cities such as Hyderabad, Chennai, Ahmedabad, Chandigarh, the RoC filings showed. LoanTap also intends to offer loan products for cars and homes this year.
The fin-tech space in India has heated up with a number of players getting into the payments, lending, insurance and personal finance segments. The sector is also seeing a lot of investment activity. A recent VCCircle analysis showed that 25 fin-tech startups had raised funding in 2017 alone. These include Fincash, MoneyTap, LoanMeet and Ftcash.