India consumer lending startup MoneyTap said Monday it has raised INR 500 crore (USD 70 million) in its Series B funding round led by Aquiline Technology Growth (ATG), RTP Global, and Sequoia Capital India, along with Japanese and Korean funds.
The fresh funding was raised through a mix of equity and debt channel, with Vivriti Capital and Credit Saison pitching in with the debt fund. Existing investors such as Prime Venture Partners and MegaDelta also participated in this round. Before this round, the company said it has raised a total of USD 1.23 million.
The Bengaluru-based company said it will use the funding to grow its loan book to INR 5000 crore (USD 700 million) in the next 12 to 18 months and will further invest the money in technology and data science. It plans to expand its presence from the current 60 to 200 cities across the country and launch operations as a non-banking financial company (NBFC). Last year it received the NBFC license from Reserve Bank of India to provide flexible credit to users.
“Our mission has been to provide credit to the growing middle-income groups, in the most flexible, convenient, and affordable manner, with money being available to the customer on tap. We will use this funding to scale our business, innovate with data-backed lending models and continue to hire aggressively,” Anuj Kacker, co-founder of MoneyTap, said in a statement.
Started in 2016 by Bala Parthasarathy, Anuj Kacker, and Kunal Varma, MoneyTap provides loans ranging from as little as INR 3000 (USD 42) to INR 500,000 (USD 7000) to its users without taking any collateral from the borrowers. The company claimed it has grown 4x in the last 12 months. The three-year-old company said it has created a loan book of over INR 1,000 crore (USD 140 million) with a disbursal run rate of INR 2,500 crore (USD 350 million) a year.
“We are thrilled to see MoneyTap’s recent performance and their laser focus on solving a clear customer pain point. They have successfully balanced growth, profitability and book quality – three of the most important indicators of an enduring fintech business,” Abheek Anand, managing director, Sequoia Capital (India), said in a statement.
Institutional funding in India’s fintech space reached an all-time peak in 2019 with a total of USD 2.6 billion poured into fintech startups compared to USD 1.25 billion in 2018. Consumer lending and peer-to-peer lending is expected to drive the fintech space in India as the demand for credit will reach USD 1.41 trillion by 2022 according to a report by DataLabs.
MoneyTap competes with consumer lending companies such as Capital Float, Paysense, FlexiLoans, and Lendingkart. Earlier this month, Naspers-backed fintech giant PayU acquired a controlling stake in Paysense and announced to invest USD 200 million in the company.