Fintech is growing rapidly in the country and startups in the sector have begun attracting both business and investor attention. Along the same direction, Infocredit Services which operates credit score advisory platform CreditVidya, has raised $2 million (Rs 13.3 crore) in its series A round of funding, led by VC firm Kalaari Capital.
Other participants in the round included Paragon Partners Managing Partner Siddharth Parekh, who has been connected with, and has invested in the company from before. The company plans to use the newly acquired funds to develop its technology platform, launch new products and expand its team.
Commenting on the investment, Bala Srinivas, partner at Kalaari Capital said,
Credit scoring is a major bottleneck in India inhibiting social and economic growth. CreditVidya has built unique technology that enables lenders to assess credit risk of 800 million-plus Indians not covered by traditional credit scoring.
Bottleneck is about the right word. A significant lack of plastic penetration in the country also means that not much data is available on the creditworthiness of an individual. This causes problems at both the end — while companies face the dilemma of to lend or to not lend, individuals seeking financial assistance receive it either late — while the company checks their credit worthiness — or not at all. This is the gap CreditVidya seeks to plug by providing companies with data on applicant creditworthiness.
Rajiv Raj, co-founder of the company, said
India’s demographic profile consists primarily of people without a credit history. CreditVidya’s solutions enable lenders to increase profitability by more accurately assessing the credit risk of these new-to-credit customers.
Some of CreditVidya’s own customers meanwhile, include names like Fullerton India, Bajaj Finserv, IDFC Bank, Tata Capital and Shriram Housing Finance etc. The company generates revenue by using its big data and advanced machine learning techniques to provide credit scores upon individuals to banking and financial institutions.
Abhishek Agarwal, chief executive, CreditVidya added,
Our big data platform leverages over 10,000-plus such unique digital data points to assess the creditworthiness of a potential borrower. We work very closely with our lending partners to develop customized scorecards for their product offering so that they can approve more credit worthy customers.
The Co-founders, Abhishek and Rajiv, form the perfect team. While the former is an UCLA and London Business School alumni, Rajiv brings along a treasure trove of experience gained by spending years with a number of leading banking and financial institutions. The niche doesn’t really have any giants in it quite yet and the company’s competition includes Delhi-based IndiaLends which interestingly, is also backed by Parekh.