Gurugram-based P2P lending startup Faircent has raised Rs 25 crore in Series B round led by Incofin Investment Management. The funding round also saw participation from existing investors – JM Financial, 3one4 Capital, M&S Partners Pte Ltd, and Aarin Capital – as well as new investors, including MUTHOOT FINCORP, EIP, Das Capital and Starharbor Asia Pte Ltd.
The startup will deploy the proceeds towards strengthening the platform’s technology and creating greater awareness about P2P lending’s significance as a new and highly rewarding asset class.
“These are exciting times for P2P lending in India, and Faircent is here to unleash the power of retail lending. As India’s largest platform, being backed by marquee investors, and the fact that the RBI has come out with progressive guidelines for the sector, is a great validation of Faircent’s business model. Moreover, with P2P lending, the financial market is all set to witness the creation of a totally new asset class,” said Rajat Gandhi, Founder and CEO, Faircent.
Founded by Rajat Gandhi and Vinay Mathews in 2014, Fairassets Technologies is engaged in the business of operating a web portal and mobile application Faircent.com, which provides a virtual P2P lending marketplace.
The company work as marketplaces that bring individual borrowers and lenders together for loan transactions without the intervention of traditional financial institutions such as banks and non-banking financial companies (NBFCs).
Recently RBI has given NBFC status to P2P platforms and has also come out with guidelines for the sector, which also include limits on lending and borrowing for individuals and redressal mechanism to address participant’s concerns.
In his earlier interview with Mint Rajat Gandhi said that Borrowing till now was restricted to banks and NBFCs, which have stringent guidelines. Whereas in new guidelines, this is an exchange model and the P2P platforms cannot lend from their own balance sheet. The platform’s returns become interest rate agnostic.
In May 2016, JM Financial Ltd invested in Faircent as a part of series A round and bought a 9.84% stake in the peer-to-peer lending start-up. Existing investors Mohandas Pai’s Aarin Capital and Singapore-based fund M&S Partners also participated in the Series A round.
In P2P lending space Mumbai-based Lenden Club raised Rs 3.5 crore in equity investment from three major investors Venture Catalyst, Anirudh Damani, and an Indian venture capital fund.
Prior to that, Bangaluru-based fintech start-up Billionloans, which also operates a peer-to-peer lending platform, raised $1 million as a seed funding from Reliance Capital’s arm- Reliance Corporate Advisory Services Ltd.
The development was first reported by ET.