Digital lending startup MoneyTap raises $70m series B

India consumer lending startup MoneyTap said Monday it has raised billion rupees (US$70 million) in its series B funding round led by Aquiline Technology Growth (ATG), RTP Global, and Sequoia Capital India, along with Japanese and Korean funds.

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The fresh funding was raised through a mix of equity and debt channel, with Vivriti Capital and Credit Saison pitching in with the debt fund. Existing investors such as Prime Venture Partners and MegaDelta also participated in this round. Before this round, the company said it has raised a total of US$1.23 million.

The Bengaluru-based company said it will use the funding to grow its loan book to 50 billion rupees (US$700 million) in the next 12 months to 18 months and will further invest the money in technology and data science. It plans to expand its presence from the current 60 cities to 200 cities across the country and launch operations as a non-banking financial company (NBFC). Last year it received the NBFC license from the Reserve Bank of India to provide flexible credit to users.

“Our mission has been to provide credit to the growing middle-income groups in the most flexible, convenient, and affordable manner, with money being available to the customer on tap. We will use this funding to scale our business, innovate with data-backed lending models, and continue to hire aggressively,” Anuj Kacker, co-founder of MoneyTap, said in a statement.

Started in 2016 by Bala Parthasarathy, Anuj Kacker, and Kunal Varma, MoneyTap provides loans ranging from as little as 3,000 rupees (US$42) to 500,000 rupees (USD$7000) to its users without taking any collateral from the borrowers. The company claimed it has grown 4x in the last 12 months. The three-year-old company said it has created a loan book of over 10 billion rupees (US$140 million) with a disbursal run rate of 25 billion rupees (US$350 million) a year.

“We are thrilled to see MoneyTap’s recent performance and their laser focus on solving a clear customer pain point. They have successfully balanced growth, profitability, and book quality – three of the most important indicators of an enduring fintech business,” Abheek Anand, managing director of Sequoia Capital India, said in a statement.

Institutional funding in India’s fintech space reached an all-time peak in 2019 with a total of US$2.6 billion poured into fintech startups compared to US$1.25 billion in 2018. Consumer lending and P2P lending are expected to drive the fintech space in India as the demand for credit will reach US$1.4 trillion by 2022, according to a report by DataLabs.

MoneyTap competes with consumer lending companies such as Capital Float, Paysense, FlexiLoans, and Lendingkart. Earlier this month, Naspers-backed fintech giant PayU acquired a controlling stake in Paysense and announced plans to invest US$200 million in the company.

This report was first published on KrAsia.