Fintech startups have recently been topping the list to raise significant amounts of funding from investors and joining the list today is LoanTap. The startup has secured $3 million in its Series A round from high net-worth individuals — Abhishek Pandey and Jaysukh Sapra.
Almost 75 percent of the money raised will be used by the company to onward lending by the platform, while the remaining money will be utilized to enhance its technology and distribution framework. The fund will also be used to expand its operations to Delhi-NCR, Pune, Mumbai and Bangalore.
Commenting about the newly raised funding, Satyam Kumar, CEO of LoanTap, said,
Our platform was established for the millennials, keeping in mind the otherwise risk-averse low-salaried loan segment. Instead of burning the entire capital on technology upgrades and distribution, we will chiefly utilise the money for creating end-user specific products and delivering it directly to retail customers.
The company is headquartered in Mumbai with another back office located in Pune. LoanTap follows an agency-based collection model catering to the low-delinquency salaried segment with a job experience of 2 to 5 years in its first phase.
Borrowers have an option to choose custom-made loan products from an array of offerings like overdraft facility, credit card takeover loans, rental, security deposit loans, advance salary loans, and consumer durable loans.
While the company is currently emphasizing exclusively on the upwardly-mobile salaried professionals, it envisions to penetrate deeper into the salaried segment. It also aims to tap into the MSME sector with an average loan size of Rs. 6 lakhs. For this, it plans to expand to the top 10 cities of the country and reaching a book size of Rs. 750 crores in the next 3 years.
Also, according to NASSCOM, the fintech software and services market in India is estimated to be worth $8 billion and is pegged to grow 1.7 times by 2020. Worldwide, the fintech market is estimated to be valued at $32 billion in 2015 and is expected to reach $45 billion by 2020.