Micro-lending startup SmartCoin raises Series A round to grow loan book

Micro-lending startup SmartCoin raises Series A round to grow loan book
Rohit Garg, co-founder, SmartCoin
17 Mar, 2020

SmartCoin Financials, a Bengaluru-based company that operates an eponymous app-based consumer lending platform, has raised over $7 million in Series A funding round led by impact investor LGT Lightstone Aspada.

Existing investors Unicorn India Ventures and Accion Venture Lab participated in the round, the company said in a statement.

 Unitus Capital was the exclusive financial advisor to the transaction.

 With this round, the total capital raised by the company so far stands at $10 million, the company added.

SmartCoin last raised capital in March 2018, when Accion Venture Lab and Mumbai-based venture capital firm Unicorn India Ventures invested $2 million.

The company will use the capital raised in Series A round to primarily grow its loan book. It will also expand its data science team, advancing its AI/ML-based underwriting platform, launch new products and grow its user base to 10 million.

“Our goal has been to provide access to credit to those underserved by the formal banking system. Our proprietary AI/ML powered risk-assessment engine enables loan-approval within minutes and provides credit through a hassle-free, completely automated process,” Rohit Garg, co-founder and CEO of SmartCoin said.

Garg founded SmartCoin in 2017 with Amit Chandel, Vinay Kumar Singh and Jayant Upadhyay. The platform provides small loans to the lower and middle-income segments -- micro merchants, micro entrepreneurs, and blue/grey collar workers. The data driven approach with proprietary AI/ML underwriting algorithms assess the risk profile of a prospective borrower in real time and delivers the loan via the digital platform.  

The company claims to have offered loans amounting to over 400 crores to half a million customers. It also received an NBFC license in October 2019.

“SmartCoin’s business model has the ability to provide data-driven insights in a customer segment that is otherwise opaque and can unlock means of formal credit and financial services. We believe that their AI/ML engine can over a period of time also deliver personalized digital services in areas such as education and healthcare for this segment,” Kartik Srivatsa, managing partner at LGT Lightstone Aspada said.

Formed in partnership with Aspada and LGT in August 2019, LGT Lightstone Aspada is the India focused impact investment platform of LGT Lightstone. LGT Lightstone is LGT Group's impact investing initiative to build a global multi-billion dollar direct investing platform focused on scalable businesses that provide access to improved livelihoods, information and services for underserved consumers around the world and promote sustainable resource utilization.

 “We identified Smartcoin quite early in their journey and decided to invest in the company. We were quite impressed with the market segment that Smartcoin wanted to address as most other fintechs at the time were chasing white collar (workers) that still have credit history in terms of digital spending,” Bhaskar Majumdar, managing partner at  Unicorn India Ventures said.

 Fintech as a sector continues to be a top draw for private investors. 

Recently, Cred founder Kunal Shah and Pine Labs CEO Amrish Rau came together to back two card companies – FamPay which targets youngsters dependent on parents for pocket money and other expenses and startups-focused Karbon Card.

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