Exclusive: Tech-enabled NBFC LivFin set to close funding round

Livfin India Pvt. Ltd, a technology-enabled non-banking financial company (NBFC) which focuses on the supply chain segment, is closing a pre-series A round of funding worth $5 million (around Rs 35 crore) from a European private equity firm, a top executive told TechCircle.

“We are finalising the term sheets and doing some due diligence which is expected to get closed by next month,” said Rahul Chander, managing director and chief executive officer of LivFin. He did not disclose the identity of the investor.

The company was founded in March last year by Rakesh Malhotra, whose first venture was inverter maker Luminous Power Technologies, which he founded in 1988 and later sold to Schneider Electric in 2011. LivFin had raised debt of Rs 100 crore last year from AU Small Finance Bank and Northern Arc Capital, among others, in addition to equity funding from the family office of the SAR Group.

“We have an equity base of Rs 44 crore. Immediately after the $5 million round is closed, we would start looking to raise a larger $15 million round in the next 12 months,” said Chander. “In all, this would be a $20 million funding round that we will raise in one year. We have a valuation of 4.5 times of invested equity already.” 

The Gurugram-headquartered company wants to focus on supply chain financing through its technology platform and expand its loan book size.

“We are talking to banks and very large NBFCs who understand this business but don’t have the ability and technology to do these smaller loans. Therefore, we are paving way for them to co-lend with us. We would do all the IT enhancements and technology building in-house and the team is already in place. We would look at blockchain technology also in the next 12-18 months,” he added.

LivFin offers credit to micro small and medium enterprises (MSMEs) in India. It provides tailor-made financing solutions for MSMEs covering the entire value chain including distributors, dealers, and vendors.

The MSME loans help businesses obtain working capital for critical operations. The startup typically lends for one to three months within a range of Rs 20 lakh to Rs 2.5 crore.

As an invoice-based supply chain financier, LivFin recently launched financial solutions for three sectors -- travel aggregators, logistics providers, and home electricals, in addition to its existing programmes in energy storage, green energy, and e-commerce.

LivFin currently has a loan book of Rs 120 crore with aggregate disbursements crossing Rs 650 crore.

Deals in the fintech segment

• June 2019: Education-focused financial-technology startup Finwego raised $1.7 million (Rs 11.83 crore) in a seed funding round led by venture capital firm SAIF Partners.
• June 2019: Gurugram-based fintech platform GroMo secured Rs 4 crore in a seed funding round led by angel investors including Livspace co-founder Ramakant Sharma and AngelList India partner Utsav Somani.
• May 2019: Mumbai-based Nomisma Mobile Solutions Pvt. Ltd, which owns digital payments and loans platform Ftcash, reeled in Rs 50 crore ($7.1 million) in a Series A round of funding led by US non-profit firm Accion International and Dutch development bank FMO.