Exclusive: Rupeek in talks to raise $100 Mn; Lee Fixel’s fund may invest

As gold prices rise, fintech startup Rupeek has been receiving heavy investor interest in the last few months. The gold loan startup is in conversations with several growth-stage investors to raise up to $100 million, said three people aware of the details of the conversation. 

If this goes through, it would be the company’s second funding round in 2020. Rupeek raised $30 million from Binny Bansal, GGV Capital and Korea’s KB Investments in February.

“Several investors including Lee Fixel’s venture capital firm Addition are in talks with Rupeek,” said one of the people on condition of anonymity. “Existing investors would also double down their investment in the company.”

Sequoia Capital, Accel Partners and Bertelsmann are Rupeek’s early backers. Sources emphasized that these three investors are expected to join the fresh financing round. 

“Rupeek has been witnessing significant inbound interest from investors. The company could be valued over $550 million in the fresh round,” said the second source. The person requested anonymity as well. “Conversation with Addition has reached a late stage.”

At present, Rupeek is disbursing over Rs 350 crore loan on a monthly basis. The company has partnered with Karur Vysya Bank and Federal Bank. According to a MoneyControl report, it’s also in talks to onboard Axis Bank and Catholic Syrian Bank.

One investment banker Entrackr spoke with also said that this fundraise is crucial for Rupeek as it looks to start loaning money on their books as well. “Rupeek has enough money in the bank, but they want to raise this round so that they can begin disbursing loans on their own books as well,” said the investment banker, requesting anonymity.

Queries sent to Rupeek, Accel and GGV remained unanswered until the time of publishing this story. We will update as and when they respond. 

Rupeek offers loans against gold digitally and had no direct competition until recently. Deepak Abbot and Nitin Misra’s indiagold is a direct competitor that entered the gold loan sector early this year. indiagold is trying to build a gold-backed open credit network and has currently launched gold loans in Delhi NCR as per their app.

Apart from that, Rupeek’s primary competition comes from established players like Muthoot Finance and Manappuram Finance which give out around 70% of the gold loans in the country. As gold prices have soared this year, coupled with an increase in a need to deal with financial stress due to the pandemic, gold loans have witnessed a surge, bringing companies like Rupeek to the limelight.

The RBI, earlier this year, also increased the loan-to-value ratio on gold loans from 75% to 90% in a bid to provide relief to borrowers.