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Online lending platform ZipLoan raises $3 mn from Matrix Partners, others

25 October, 2017

Online lending platform ZipLoan, which is operated by Delhi-based Blue Jay Finlease Ltd, has raised Rs 20 crore (around $3 million) in a funding round led by Matrix Partners India.

ZipLoan’s existing investors Sarbvir Singh, managing director, Capital 18; WaterBridge Ventures and Whiteboard Capital also participated in this round.

The startup will use the funds to strengthen its team, expand to new geographies and enhance technology platform, it said in a statement.

ZipLoan is currently operating in Delhi and Indore.

Launched in September 2015 by Kshitij Puri and Shalabh Singhal, ZipLoan is a technology-enabled lending platform that provides loans to MSMEs. The startup offers loans of Rs 1 lakh to Rs 5 lakh over a period of 6-24 months.

The firm uses an automated credit engine or risk assessment tool called ZipScore to assess the creditworthiness of prospective customers within a few minutes, it claims. 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 has partnered with banks including IDFC Bank and non-banking financial companies such as IFMR Capital and Essel Finance which lend through its tech platform.

“The investment from Matrix would help us invest in automation and in improving our credit scoring algorithms,” Singhal said.

The firm targets small business owners who are usually ignored by large financial institutions due to the limited scale of operations.

“With 40 million SMEs, SME-lending is a large opportunity, but with tough execution challenges. A cautious, technology-led approach can bring down underwriting and sourcing costs to serve the SMEs at smaller ticket sizes…. It’s still early days of the India fin-tech story and will continue to invest in the space”, said Vikram Vaidyanathan, managing director, Matrix India.

In June this year, ZipLoan had raised $650,000 (around Rs 4.2 crore) in its pre-Series A funding round led by WaterBridge Ventures.

Earlier in October 2016, the company had raised an undisclosed seed round from GrowX and other angel investors, including Sunil Kalra, Murugappa Group scion Arun Venkatachalam and former Snapdeal executive Badal Malick.

The fin-tech sector in India has gained a lot of traction in recent years with many players emerging in payments, lending, insurance and personal finance segments. At least 25 fin-tech startups had raised funding between January and May this year, according to a VCCircle analysis. Several startups have emerged in the online lending segment over the past two years, and most of them are targeting small and medium-sized businesses.

Earlier this week, personal loan app CASHe, raised Rs 20 crore (around $3 million) in debt funding from IFMR Capital.

Last week, micro-lending platform KrazyBee raised $8 million (around Rs 51.7 crore) in its Series A funding round led by Chinese smartphone maker Xiaomi Technologies and Shunwei Capital.

Last month, online consumer lending platform CrediFiable raised an undisclosed amount of funding from Kae Capital.

Online lending platform EarlySalary raised Rs 5 crore in debt financing from IFMR Capital earlier this month.

Recent deals in the lending segment include Shubh Loans raising $1.5 million (about Rs 10 crore) in a pre-Series A round from SRI Capital, Japan’s BeeNext and Pravega Ventures.

KNAB Finance raised a little over Rs 2.5 crore in two rounds from InCred and more than a dozen individual investors. InCred has also invested in fin-tech startup DigiLend Analytics & Technology Pvt. Ltd.

Bengaluru-based Billionloans Financial Services raised $1 million in seed funding from Reliance Corporate Advisory Services Ltd, a wholly owned subsidiary of Reliance Capital Ltd, in July.

In June, Delhi-based digital lending platform Stashfin raised $5 million in a pre-Series A funding from Kirloskar Group’s venture capital arm Snow Leopard Ventures, Singapore-based Alto Partners, GrowX Ventures and a clutch of angel investors. The same month, Ahmedabad- and Bangalore-based Lendingkart raised Rs 50 crore ($7.8 million) in debt from Yes Bank.

Around the same time, online peer-to-peer lending platform LoanMeet secured seed funding from a clutch of investors, including Chinese entrepreneurs. Other startups that have raised funds in the lending space include LoanTap, Innoviti, Fincash, MoneyTap, Loan Frame and Ftcash.

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Online lending platform ZipLoan raises $3 mn from Matrix Partners, others

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