Bengaluru based Fintech consumer lending startup MoneyTap has raised $9 million in series A led by Sequoia India. The exiting investors New Enterprise Associates (NEA) and Prime Venture Partners also participated in the funding round. This brings the total capital raised by the firm to $12.3 million.
Focussed on individual lending, MoneyTap was launched in September 2015 as an app-based consumer credit line by entrepreneurs Bala Parthasarathy, Anuj Kacker and Kunal Varma. Parthasarathy was also the co-founder of Prime Venture Partners and in 2007, he volunteered for UIDAI under Nandan Nilekani.
The fresh capital will be used to enhance technology, especially to incorporate India Stack features such as the unified payments interface, data science, R&D, e-sign. Improving the credit-scoring algorithm using alternative data and to expand to 50 cities from the current count of 14 by the end of this year is on radar.
“Consumer credit in India is highly under penetrated and is a complex problem to solve. MoneyTap combines an experienced team with a thoughtfully designed product, and their strong early traction is a testament to the efficacy of their approach to address this massive market opportunity,” Abheek Anand, principal at Sequoia India, said in a statement.
Founder of the start up is pretty confident of its growth. Bala Parthasarathy wants to strenghten Company’s position by issuing credit lines worth Rs 300 crore, through six other banking partners, across 50 cities in India, by the end of this fiscal year.
At MoneyTap a consumer can choose to borrow as little as Rs 3,000 or as much as Rs 5 lakh or up to their maximum eligibility limit. It has partnered with RBI Bank to offer the credit line but the company says that it will be partnering with six other Banks and Non-Banking Finance Corporations (NBFCs).
Qualified customers, after completing the Know Your Customer (KYC), will pay a one-time setup fee of Rs 499 (plus tax) tax in the first month’s bill from RBL Bank. It claims to evaluate the user’s eligibility in less than 4 minutes after which it decides on the customer’s application the credit line amount they are eligible for. Users also get an RBL and MasterCard card with the sign-up.
MoneyTap is different from other lending company, which offers its customers to decide their own EMI plans with flexible payback periods ranging from 2 months to 3 years. Interest is paid only on the amount borrowed and rates can be as low as 1.25% per month.
MoneyTap competes with Capital Float, Paysense, FlexiLoans and Lendingkart and others in the lending startup ecosystem.
In recent funding, Paysense raised $5.3 million funding in series A from Jungle Ventures. It had earlier in 2015, raised $2.3 million from Nexus Venture partners. EarlySalary, which offers salary advances and instant cash loans, raised $4 million from IDG ventures India and DHFL. LoanTap raised $3 million in Series A round of funding from HNIs including Abhishek Pandey and Jaysukh Sapra, in August last year.
Image credit: MoneyTap