India’s salary-linked loan provider PerkFinance announced a seed funding of US$900k by Fosun RZ Capital (an affiliate of Fosun Group), Overbrook Capital’s founder Eric Bunting, angel investor Krishna Vinjamuri, as well as Karan Virwani, CEO of WeWork India.
PerkFinance facilitates loans through its lending partners for blue-collar workers. Borrowers can customise the amount and tenure of the loan, according to their financial needs.
“We are building win-win solutions in the personal finance market by working with companies and their employees, and our lending partners. We will use the investment money to scale our model by enhancing our technology and marketing”, said Vikas Kothari, Co-Founder of PerkFinance in a press statement.
The investors involved in this funding are welcoming PerkFinance’s initiative to reaching out for blue-collar workers as it brings fresh colour to India’s fintech ecosystem. “PerkFinance is changing the lives of millions with its product. For a long time, blue-collar workers have struggled with exorbitant interest rates. This needs to change and Perk is doing exactly that,” said Tej Kapoor, Managing Director and Head of Fosun RZ Capital India.
On the other hand, Eric Bunting, who has invested in more than 26 fintech startups around the world, believes that PerkFinance’s business model is ideal for both employees and employers, and therefore promises a bright future for the business. “I like PerkFinance’s strategy. All of the elements work together to keep customer acquisition cost low, customer retention high, bad debt low and effective cost of credit to employees low,” he says.
In the past few years, India has experienced the emergence of numerous FinTech start-ups, accelerators, and incubators. The National Association of Software and Services Companies (NASSCOM) reported that there are approximately 400 fintech firms operated in India today, and the number is expecting to grow steadily in the years coming, signalling that the country is quite exciting in welcoming new players in the industry.
With 40% of India’s population are currently not connected to banks and only 13% of payments are made online, the country has a large untapped market for financial service technology startups. The same premise also encouraged Vikas Kothari to establish PerkFinance back in 2017.
When working in the family business, Kothari noticed that many of his employees would frequently request for loans to the company as the banks refused to give them credits as they were seen unqualified to meet the conventional bank’s standard and stringent eligibility checks. Through PerkFinance, Kothari aspires to provide blue-collar workers access to money whenever they need it.
PerkFinance has partnered with more than 20 employers with a combined workforce of more than 30,000 employees. The company is also a member of WeWork Labs -WeWork’s global platform dedicated to empowering early-stage startups, providing them with space, global community, and educational resources to help them grow. PerkFinance was among the first startups to be selected for the WeWork Labs programme in India earlier this year.
Editor: Ben Jiang