Microlending platform SmartCoin has bagged $2 million in pre-series A round led by Chinese VC fund and Accion Venture Lab. Besides, existing investors like Unicorn India Ventures and ISME ACE, an unnamed Chinese venture fund also participated in the round.
SmartCoin will use the fresh proceeds to upgrade its technology, algorithms platforms, hiring, and expansion.
Incorporated in 2016 by Garg, Amit Chandel, Vinay Kumar Singh and Jayant Upadhyay, SmartCoin provides loans to mobile users through credit scores by using data science and machine learning algorithms.
SmartCoin factors eligibility of the borrower through SmartCoin Score, which takes into account various information such as financial profile, social networks and behaviour data, a post which money is transferred digitally to the borrower bank account.
The company claims to offer loans within two hours and aspires to complete 50,000 loans books by the end of this FY19.
In January, SmartCoin was among six startups selected for YES Bank-backed Indian School of Management and Entrepreneurship (ISME) initiated ACE Accelerator Program. The accelerator had promised to invest in the range of $1,00,000 to $2,00,000 in each startup for a minority shareholding.
Of late, the Bengaluru-based startup is partnering with leading NBFCs and microfinance companies to meet the lending requirement of borrowers.
Currently, micro credit reaches to not more than 20 per cent of the total households via various banks and NBFCs. Banks and other financing institutions reportedly serve about 6.3 crore microcredit loans every year. Since traditional banks and NBFCs have failed to meet the credit need of people, the opportunity for tech-enabled microlending platforms is slated to grow.
At present, there are several platforms claim to ease the process of credit borrowing for salaried individuals as well as students. While EarlySalary and Loanmeet are solving low ticketsize loan for working professionals, KrazyBee, Credit Mantri, Eduvanz, Slicepay and many others are eyeing to meet credit needs of students.
The development was first reported by Mint.