EarlySalary in talks to raise around $100 Mn in a new round

Consumer lending platform EarlySalary is in talks to raise a new round from new and existing investors, three people aware of the matter told Entrackr. The fresh funding for the Pune-based startup is coming at a time when a couple of startups in the earned wage access and salary in advanced space have grabbed headlines with noticeable funding in their early stage.

“EarlySalary is in the market to raise around $100 million in new financing and TPG Growth is likely to lead the round,” said one of the sources on the condition of anonymity. “Existing investors along with a couple of new ones may also participate.”

EarlySalary is raising a new round after a gap of two years. In October 2020, the company had raised $10 million as part of its Series C financing from Eight Road Ventures and Chiratae Ventures. Entrackr had exclusively reported the development.

EarlySalary partners with small, medium and large companies to offer short-term loans for shopping, travel, education, and medical emergencies. Its product suite includes instant loans, personal loans, BNPL and SalaryCard.

According to the company’s website, it has partnered with more than 280 corporates and provided its financial wellness services to more than 50,000 employees, disbursing over 1,200 crore worth of salary advances which is in the process. EarlySalary’s lending partners include Northern Arc Capital, Incred, Vivriti, Aditya Birla Finance and its own NBFC platform: EarlySalary Services Private Limited.

In January, EarlySalary claimed that it has disbursed 2.5 million loans worth Rs 5,000 crore since its inception in 2015.

“The deal has reached an advanced stage and if nothing goes wrong from here, it’s likely to close in a few weeks. The deal size may vary depending on the interest of investors. They are also eying international expansion,” said another source.

EarlySalary and TPG Growth declined to comment on the story. 

It’s worth mentioning that EarlySalary was under the scanner after the Reserve Bank of India released a circular for fintech companies in June. As per the circular, Prepaid Payment Instruments (PPIs) such as wallets cannot be loaded using credit lines issued by non-banking financial companies. The circular came as a shocker for some of the startups such as Slice, Uni, LazyPay, PostPe, Jupiter, MobiKwik, Ola Postpaid, and EarlySalary.

Following the circular, EarlySalary halted its card services until further clarification.

Founded by Ashish Goyal and Akshay Mehrotra, the company directly competes with Slice, ZestMoney, LoanTap, PaySense, MoneyTap, and IndiaLends among a few others. In the employee financial benefit space, its competitors include Refyne, Jify, Kaarva, Daily Salary in the employee financial benefit  space. In January, Refyne scooped up $82 million in its Series B round led by Tiger Global. Earlier this month, Jify also raised $12 million in its Series A round.

While EarlySalary is yet to file its annual financial report for FY22, the company’s revenue from operations declined by 17% to Rs 84.2 crore in FY21 from Rs 101.6 crore in previous fiscal year (FY20). It suffered a loss of Rs 18.8 crore during FY21.