Faircent, an online peer-to-peer lending platform, has today received an disclosed amount of funding in its Series A round from JM Financial Products Ltd., a subsidiary of JM Financial Ltd.
The newly raised funding will be used by the company to build its data analytics platform. For this funding round, the company has diluted around 9.8 percent of its stake. However, JM Financial has not disclosed the value of its investment in its statement to stock exchanges.
In the current Series A round, along with JM Financial, other investors have also participated, including Doreswamy Nandkishore, Kshitij Jain, Mohandas Pai’s Aarin Capital and Singapore-based M&S Partners.
Commenting about the same, Vinay Mathews, founder and chief operating officer at Faircent, said,
We shall use these funds to further refine our tech enabled risk mitigation algorithms through big data analytics thereby empowering our lenders to take better decision and creating greater access to credit for borrowers.
The Gurgaon based startup was founded by Rajat Gandhi and Vinay Mathews in 2013. Faircent serves as a marketplace where potential lenders and borrowers can register and interact to strike deals on lending and borrowing. It lets you easily take up money from willing lenders, or lend money to potential borrowers.
The company displays a real-time feed, which shows parameters like current average interest rates on its platform, number of loans approved/disapproved, and average loan amount sanctioned. It generates revenue by charging an upfront fee once a deal is finalized for its services and facilitating the process.
Faircent claims to have over 6,000 registered lenders and 25,000 borrowers on its platform. It has disbursed total loans of Rs. 4.5 crores in over 18 months.
Manish Sheth, chief financial officer at JM Financial Group, said,
Faircent has been at the fore front of disrupting the online lending space in India and has demonstrated its leadership position in building a robust P2P business model by adding value to both borrowers and lenders.
In January 2015, Faircent had secured $4 million in an angel funding round from Devesh Sachdev and Ashish Tiwari, promoters of Fusion Microfinance. Later on, it raised $250K in pre-Series A round from M&S Partners. In the same, it again raised an undisclosed amount in October 2015.
The latest investment from JM Financial comes after the Reserve Bank of India (RBI) initiated steps in order to regulate the nascent and unregulated P2P lending business, coming up with a consultation paper on the same.
The paper deals with pros and cons of regulating P2P lending in its early stages and also contains various steps proposed by RBI to regulate the sector.
Once the sector is regulated, P2P lending startups like Faircent may further get a boost with increased investor interest and funding prospects.