Micro-enterprise focused lending platform LoanMeet has shut down operations as if failed to raise follow on capital. According to Entrackr’s three sources, the firm has been winding up operations for the past two months.
“LoanMeet had tried raising further investment. However, investors were not convinced as lending enabling market has been overcrowded with several deep pocket players,” said two sources. The company also laid off about 15 people in the past couple of months.
Sources requested anonymity as they aren’t authorized to speak to media.
LoanMeet used to finance working capital requirement, B2B marketplace financing, cash credit line and channel financing in the range of Rs 5,000 to 5 lakh for short term period ranging from 15 days to 9 months.
The firm had raised an undisclosed amount from a clutch of individual investors including Chinese investors and entrepreneurs Cao Yibin and Huang Wei.
Founded in 2016 by Sunil Kumar and Ritesh Singh – LoanMeet- claimed to build first-loss default guarantee (FLDG) for three NBFCs partners.
“Founders also have moved and started working on a new project,” added aforementioned sources. Queries sent to LoanMeet’s Kumar remain unanswered till the publication of this post. We will update the post as and when he responds.
LoanMeet had many competitors including Capital Float, Loan Frame, Happy Loan which are aggressive in SME loan segment and have bigger loan books. Shut down of companies like LoanMeet is not surprising as the segment has been overcrowded amidst rush amongst fintech entrepreneurs for solving credit access for SMEs.
In fact, there has been a sort of bubble in both consumers as well as business lending space. While many companies claim to solve credit access for SMEs and consumers, a majority of them actually don’t go beyond collecting basic pieces of information- PAN, loan history, credit score, etc.