LendingKart, an online financing company which provides working capital for startups and small & medium business owners, has raised $10 million in a fresh funding round.
This funding round saw involvement of Saama Capital and Mayfield Funds along with the participation of Ashvin Chadha and Shailesh Mehta. With fresh funds, the company is looking to up its loan disbursements by six times a month, build a team for e-commerce lending & analytics and to expand its operations.
LendingKart, an Ahmedabad-based startup which started its operations in 2014, aims to make a difference in the world of small business financing. Earlier, it had raised seed funding from India Quotient, Ashish Goenka and other private equity investors.
Founded by Harshvardhan Lunia and Mukun Sachan, the company is aspires to help entrepreneurs and small businesses with Working Capital Finance. It uses analytics and big data scoring to evaluate client’s business.
However, it’s working is quite different from banks and other NBFC’s. It does not focus on vendor’s old records such as Past Financial Statements & Income Tax returns to evaluate the credit risk profile of a potential client. It just focuses on their current year’s cash flows and business growth.
There is no collateral, no physical offices and no physical verification staff members on the ground. It gives short-term working capital loans of up to Rs 40 lakh based on an online form filled by the borrower.
It disburses the loan amount through affiliated lenders, or lending partners, in three working days which can be used by the company to pay the suppliers, employees, taxes and other liabilities. LendingKart claims that it disburses about 70 short-term loans every month. For each loan, it charges somewhere around 1.5 percent to 2 percent interest a month.
The company believes that by making working capital funds available at finger tips, it helps entrepreneurs to focus on their business instead of worrying about gaps in their cash-flows.
It currently has offices in Ahmedabad and Bangalore but it’s operations are at pan-India level. In a short span of eight months of operation, it has covered 40 cities and 16 states in India.
Harshvardhan Lunia, CEO of LendingKart, said,
Lendingkart has identified the pain area where new small businesses, 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 or NBFCs.
In the recent times, many finance related firms has raised funding. This include IndiaLends which raised funds in pre-Series A round yesterday, CreditMantri which raised $2.5M from IDG Ventures & others and Capital Float.