Bengaluru based Fintech startup MoneyTap raised $9 million in a round of Series A funding from Sequoia India, New Enterprises, and Prime Venture Partners. The latter are existing investors in MoneyTap. This round of funding has taken the total capital raised by the company to $12.3 million.
The main aim of the company is to deliver small loans to individuals in partnership with banks in a smooth and efficient manner. It was launched in September 2016 and functions primarily through an app. While it is currently functioning in 14 cities, the target is to reach 50 by the end of the year.
The capital that has been presently raised will be used to improve the technology used to incorporate a unified payment interface (UPI), as well as to make space for e-signatures. It will also be used to hire more people to form a new data science team.
The target audience of the company are individuals who are earning a salary that is above a minimum of Rs. 20,000 per month. The app takes in the user’s information such as his credit score, transaction history, as well as other data that is put into algorithms to figure out whether or not the customer is eligible for a loan. The maximum line of credit that a customer can acquire is Rs. 5 lakh.
Bala Parthasarathy, co-founder and CEO of MoneyTap said,
We are uniquely placed wherein we sit on top of banks and NBFCs. After downloading our app a consumer can within five minutes know if they are eligible for borrowing credit. They can then complete the KYC formalities on their phone and can borrow any amount under the limit they are eligible for
The company’s app currently has over 300,000 downloads but have not commented on how many of these downloaders have been approved for credit. According to Parthasarathy, a strength that sets MoneyTap apart from other startups is that it can work with banks and integrate its own system with theirs. But, this does not mean that it is looking to integrate with all banks, it prefers to stay with a few banks that it can work well with.
MoneyTap is presently aiming to have offered credit worth Rs. 300 crore by March 2018. Parthasarathy compared the services offered by his company to overdraft facilities that are available in banks saying,
Today, in the banking system you either get a loan or a credit card—those are the only two lending products in the unsecured consumer lending space. What we are offering is a consumer line of credit
Say you get approval for Rs1 lakh, but you don’t need to take it immediately. You take it and keep it in your app. There is no fee other than a small setting-up cost, until you take the money. But let’s say you urgently want Rs25,000 sometime three months later, you just have to swipe and the money will be transferred to your bank account
