Lendingkart Group-run Lendingkart Finance on Tuesday said it has raised $5 million in a new debt round of funding from the Dutch entrepreneurial development bank FMO, a returning investor.
The deal will help the micro, small and medium enterprise (MSME) digital lender strengthen its three-year relationship with the bank receiving funds through non-convertible debentures, increasing its cumulative exposure to $19 million so far, as per a statement.
The new funds will be deployed towards expanding the reach of the Ahmedabad based startup’s financial products to the vast MSME segment across about 100 sub-industries in India, the statement said.
FMO has backed other Indian companies, such as Bengaluru-based fintech firm Innoviti Payment Solutions, and Gurugram based agritech startup DeHaat. The bank aims to supports sustainable private sector growth in developing countries and emerging markets.
“The new transaction is aligned to FMO's ambition to accelerate financial inclusion through innovative technological solutions. As India recovers from the pandemic and uncertainties presented by it, we are pleased we can partner with Lendingkart to better support its customers, with a focus towards women-run businesses and micro enterprises,” Huib-Jan de Ruijter, chief investment officer, FMO, said.
Lendingkart Finance has so far disbursed over 1,00,000 loans to more than 91,000 MSMEs across all the 29 states and seven union territories of India, the company said. It has actively pursued to improve the access to credit to the underserved and unserved MSEs of Bharat, it said.
Through Lendingkart Finance, the company provides short-term working capital loans to SME borrowers, using big data analytics and machine learning to analyse creditworthiness. The loan ticket sizes range from Rs 50,000 to Rs 1 crore for a period of one to 36 months. Lendingkart also offers customised financial products to businesses.
The company had decided to lay off 200 people or 30% of its workforce, citing the “tremendous impact” of the Covid-19 pandemic on the economy, in May 2020.
The development had come days after the firm raised about $42 million in a growth funding round from returning investors Fullerton Financial Holdings (FFH), Bertelsmann India Investments, Sistema Asia Fund and India Quotient.
Singapore sovereign wealth fund Temasek Holdings owned subsidiary FFH is the company’s largest shareholder. Founded in 2014 by Harshvardhan Lunia, the company has offices in Ahmedabad, Bengaluru, Mumbai, and Delhi-NCR. It has received equity infusion of Rs 1,000 crore ($134.41 million as per current exchange rates).