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Xiaomi, Shunwei Capital invest $8 mn in microlending startup KrazyBee

16 October, 2017

Microlending platform KrazyBee, which is operated by Bengaluru-based Finovation Tech Solutions Pvt. Ltd, has raised $8 million (around Rs 51.7 crore) in its Series A funding round led by Chinese smartphone maker Xiaomi Technologies and Shunwei Capital.

Others who participated in the investment are RK Group and E-city Ventures, which is part of Essel Group.

The Series A funding is a mix of equity and debt, the startup said in a statement.

Shirley Mao, investment director at Xiaomi Technologies, said, “The Indian demography has a large population of urban young adults that spends a lot online and offline. For such an enormous ecosystem, the need for urgent personal finance for purchase requirements is underserved. A focus on tech-based credit evaluation and compliant sourcing of funds can help capture and penetrate this market.”

To date, KrazyBee has raised funding worth $13 million. The company raised a seed funding round worth $2 million from Fenqile, a micro-lending platform for young adults in China, and venture capital firm YeahMobi in June last year; and $3 million in pre-Series A funding from VC firm Plum Ventures and existing investors.

The startup will use the latest funding for strengthening its risk model and algorithm, catering to new market segments and focusing on product diversification and geographical expansion in existing segments, it said.

KrazyBee was founded in 2015 by Wan Hong and Madhusudan E. Madhusudan holds a bachelor’s degree in engineering from National Institute of Technology Karnataka, Surathkal and was previously the business development lead at Chinese telecom equipment and smartphone maker Huawei. Hong is a graduate of Wuhan University in China and previously worked for Huawei for over 10 years.

KrazyBee offers flexible installment-based purchases to young professionals and college students with no credit history or credit cards. Currently, it allows e-commerce purchase, cash credit, two-wheeler credit, college semester/tuition fee credit, among others. It operates in close to 800 colleges in India, and in each of these colleges, it has one or more student campus managers. Apart from having Android and iOS apps, KrazyBee runs an app for campus managers who use the app to complete ‘know your customer’ (KYC) procedures. The startup has also come up with an option for the customers to e-verify themselves after completing their profile.

The micro-lending platform has been operating across Bengaluru, Hyderabad, Pune, Mysore and Vellore, and has recently expanded to Mumbai, Chennai, Coimbatore, Nagpur, Nashik and Manipal.

It claims to process nearly 1,700 loan applications a day, and boasts of a non-performing asset (NPA) score of less than 1%. The startup has rolled out credit worth Rs 150 crore in less than 18 months. The average size of an e-commerce purchase via the platform is close to Rs 12,000, according to the statement.

KrazyBee – which has signed alliances with six non-banking financial corporations that lend through its platform – also got its own NBFC licence from the Reserve Bank of India in June this year.

“Financial independence among young adults is the need of the hour. A solution which helps them avail personal finance at maximum ease and minimum time is going to win the game in this market. We are actively working towards a risk algorithm that helps us achieve a system-generated decision on every profile,” Madhusudan said.

Shunwei Capital, which invests in mobile internet, Internet of Things, and tech companies, is keen on investing in Indian startups, in partnership with domestic VC firms. The Chinese VC firm had closed its third fund in July 2015 with a capital commitment of $1 billion. In April this year, Shunwei Capital, along with Accel Partners invested Rs 25.5 crore (around $3.8 million) as part of a Series A round in a gaming startup Mech Mocha.

In February this year, Shunwei had invested $3 million in Mumbai-based Truebil, a marketplace for pre-owned cars.

Xiaomi made its first publicly-disclosed investment in India in April 2016. It had led a $25-million round in online entertainment company Hungama Digital Media Entertainment as part of its strategy to introduce local content on its smartphones.

The fin-tech sector in India has gained a lot 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.

Last month, online consumer lending platform CrediFiable, which is operated by Bengaluru-based OneFiable Technologies Pvt. Ltd, raised an undisclosed amount of funding from Kae Capital.

Social Worth Technologies Pvt. Ltd, which runs online lending platform EarlySalary, earlier this month raised Rs 5 crore in debt financing from IFMR Capital.

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 Bengaluru-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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Xiaomi, Shunwei Capital invest $8 mn in microlending startup KrazyBee

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