Pune-based Social Worth Technologies Pvt. Ltd, which runs online lending platform EarlySalary, has raised Rs 100 crore ($15.7 million) in a Series B funding round led by Eight Roads Ventures India, a company statement said.
Existing investors IDG Ventures India, Dewan Housing Finance Corp. Ltd. (DHFL) and Ashok Agarwal, director of forex and money transfer services firm Transcorp International Limited, also participated in the round, the statement added.
As part of the transaction, Dhyanesh Shah, principal at Eight Road Ventures India, will join the board of EarlySalary.
“The financial services market in India is ripe for disruption, and we have been actively looking for differentiated opportunities. The company has cleverly leveraged data and technology to provide instant affordable loans to an otherwise excluded customer segment,” Shah stated in the media note.
The company will use these funds to expand its operations and target a disbursal of one lakh monthly loan applications by the end of 2018. According to the company’s spokesperson, EarlySalary currently disburses around 14,000 to 14,500 loan applications per month.
Last year, the company raised funds through a mix of equity and debt. In May last year, it raised $4 million in its Series A funding round led by IDG Ventures India and DHFL. In September 2017, it raised Rs 5 crore ($780,675) in debt financing from IFMR Capital.
EarlySalary was founded by Akshay Mehrotra and Ashish Goyal in 2015. The three-year-old startup essentially offers a mobile app that allows salaried individuals to avail instant loans for an average tenure of 30 days or till the next salary cycle. Users can avail these loans in the form of salary advances or credit card cash withdrawals. The mobile app is available on both the Google Play Store and App Store.
The company claims that it can disburse up to 50% of an individual’s salary in less than 10 minutes and stated that around 70% of its loan applications are disbursed in this mode. Based on the nature of the loan and amount, the company offers repayment tenures ranging between seven days to a maximum of three months. The company has capped the upper limit for sanctioning loans at Rs 2 lakh.
Besides, users can also use the loan limit to shop online on credit. EarlySalary, which currently offers its services in 15 cities across India, plans to introduce new products that can address the short term credit needs of working professionals in the younger demographic.
Mehrotra, who is chief executive of the firm, was earlier chief marketing officer at Future Retail Ltd and PolicyBazaar.com. Goyal, who is the chief financial officer, is a chartered accountant and previously served as chief investment officer at Bajaj Allianz General Insurance.
The company’s top management also includes Vimal Saboo, the chief business officer, and Vivek Jain, the chief technology officer. Saboo had previously served as the business head at financial services firm Edelweiss Capital and has also worked at Axis Bank earlier in senior roles. Jain had previously served as the principal technology architect at software services firm Infosys.
In 2017, the Indian fin-tech sector mopped up around $1.84 billion in total funding with online lending platforms accounting for the maximum investment deals by volume—about 45 of the total 75 deals in the space. Industry experts also expect that online lending platforms will continue to get unmatched investor attention in 2018 as well.
Other lending platforms that recently secured funds include peer-to-peer lending platform Faircent, which last month raised Rs 25 crore ($4 million) in a Series B round of funding led by Belgium-based impact investor Incofin Investment Management.
Likewise, last month, Mumbai-based fin-tech startup CapitaWorld Platform Pvt. Ltd raised an undisclosed amount through convertible equity from high-net-worth individuals, corporate honchos and investors from Hong Kong and the Middle East.