Bengaluru: Rupeek, a digital lending company offering gold loans, is set to raise about $12 million (about Rs 79 crore) in an early-stage funding round led by Accel Indiaand financial inclusion-focused investment firm Lok Capital, according to two people familiar with the development.
The company is expected to be valued at $40-45 million after the transaction, they said, adding that existing backer Sequoia Capital India will be participating in the round. “The startup is adding Rs 2 crore to its loan portfolio every month and has a revenue run rate of $1 million,” said one of the persons mentioned earlier.
The transaction underlines growing investor interest in the online consumer lending space. Rupeek and the investors declined to comment.
Rupeek has raised angel funds from Facebook executive and former Snapdeal chief product officer Anand Chandrasekaran. The startup, which is not itself a non-banking finance company, has partnered with NBFCs to give out gold loans.
The gold-loan space has typically been dominated by older NBFCs such as Muthoot Finance and Manappuram Finance, which have been backed by marquee investors WestBridge Capital Partners, India Equity Partners, Baring Private Equity Asia, GIC and several others, according to data from startup researcher Tracxn. Sequoia Capital was an investor in Manappuram Finance.
Some new companies that have come up in this space in recent years include Gold Uno, an online gold loan comparison platform founded in Mumbai in 2015, and Achievers Quick Gold Loan, an NBFC offering gold loans, founded in 2013 in Kolkata, Tracxn data shows.
“In the last three-to-five years, a lot of NBFCs have become active in the digital gold loan space. The two main attractions is that it is asset backed and it can be dematerialsed,” said Vivek Belgavi, partner and leader for fintech at PwC India.
“While the older companies have mainly been on the traditional brick and mortar model, new companies can bring in better customer experience,” he said.
On its website, Rupeek says it is an assetbacked online lending platform, which is “disrupting traditio nal brick-and-mortar lending model”.
“Our low operational costs and credit evaluation tools are making credit cheaper for borrowers and investing more valuable for lenders,” the website says.
While Rupeek has a customer-facing mobile application, it also has physical branches where customers can pledge gold. The company also offers personalised support, on demand pickup and return of the valuables while promising industry standard protection.
The company offers a tenure of one year on the gold loan. The company allows the gold loan to be used for general purposes, though Belgavi said there could also be a trend for specialised gold loans for medical purposes and other such use cases.
Source: Economic Times