LendingKart, the marketplace lender based in India, has announced that they have secured $10 million worth of investment through a series A offering. The investment comes from two venture capitalists - Saama Capital & Mayfield Fund - and two high net worth individuals - Ashvin Chadha and Shailesh Mehta. LendingKart, which has processed loans for 50 cities and 17 states, says that the investment will allow them to spread into more cities and towns in India, improve their credit scoring technology and increase the size of their workforce.
LendingKart prides itself on its forward looking credit assessments and its ability to harness big data:
"Unlike banks and other NBFC’s, we do not focus on vendor’s old records (Past Financial Statements & Income Tax returns) to evaluate the credit risk profile of a potential client. We focus on their current year’s cash flows and business growth." (Company website)
“Lendingkart has enough data available to determine a customer’s intent to pay back a loan, the quality of his product or service, the financial health of his business, and ability to survive with competition...We don’t ask the customer to fill out large forms. We scrape this data from public and private sources and APIs.” CEO Harshvardhan Lunia told TechCrunch.
LendingKart joins rivals, such as FairCent and i-lend in the Indian P2P space. Their USP, they claim, is that they offer smaller loans – 1,000,000 rupees (£10,000) - than their competitors, lending to a different demographic. Lunia continued that with this focus on niche markets, the utilisation of big data and the firepower provided by the $10 million investment, LendingKart is primed for increased growth:
"We will be targeting all the niches in the country where secondary verified data is available to us from third-party sources"
With India's SME market growing, and the eCommerce industry set to reach $50 billion by 2020, there is huge opportunity for LendingKart. Lunia commented:
"SMEs and startups are many a times unorganised and have hardly maintained their books of account, thus they do not get loans from conventional channels like bank"
This pushes them towards platforms such as LendingKart - or competitors. Lunia must be hoping that the significant investment of $10 million will help them carve out a sizeable market share.