After acquiring a majority stake in two-wheeler focused online lending platform CreditMate, payments major Paytm is slated to invest $5-10 million fund in the Mumbai-based fintech startup.
Importantly, the last investment round in CreditMate came at a time when Paytm was launching its interest-free short-term loan product – Paytm-ICICI Bank Postpaid. It was the debut for the Noida-based company into lending space.
According to an ET report, the deal has not been finalised yet.
Since the backing from Paytm, CreditMate claims to have grown at 40 per cent month-on-month in terms of the number of loans disbursed. Besides, the lending platform has managed to restrict repayment failures to less than 1 per cent in the first 12-18 months, claims CreditMate founder and CEO Jonathan Bill.
Apart from loan disbursal, CreditMate is also planning to venture into automobile insurance soon. With the further backing from Paytm, the company looks to improve its loan book. On the other hand, Paytm will leverage CreditMate’s proprietary credit and asset valuation technology and loan management system.
Founded in 2016 by Bill, Ashish Doshi, and Aditya Singh, Creditmate claims to have disbursed around 10,000 loans after having received more than 15,000 applications. It focuses on enabling its dealer partners to distribute two-wheeler loans to customers with no formal credit history.
CreditMate works with banking, financial services companies and NBFC’s such as Optimus Finance Limited and KJMC Financial Services Limited.
With an average loan size of Rs 52,000, CreditMate has also started financing new vehicles. Besides backing from Vijay Shekhar Sharma-led company, it secured $500,000 seed fund from India Quotient in October 2016.
Paytm entry into lending space was a good sign for the fintech ecosystem in terms of increasing competition and marketsize. The payments major is planning to work as a full stack financial company.
Apart from payments service, the company now offers lending, banking, insurance and soon it will be operating its wealth management vertical Paytm Money. The service is an effort by Paytm to engage users money for more time and build sustainable loyalty.
Meanwhile, Paytm Money has also received about Rs 9 crore from the parent entity. Following the capital infusion, Paytm’s senior vice president, Pravin Jadhav, will now act as a whole time additional director at the company.