Lendingkart Finance Limited has secured Series C funding of Rs 565 crore (approx US$87 million) in equity funding led by Singapore’s Fullerton Financial Holdings Pte Ltd (FFH), along with existing investors.
Lendingkart is a non-banking finance company (NBFC) that provides small business loans ranging from Rs 1 lakh to Rs 40 lakh on its platform to SMEs. It claims to sanction them in a day and disburse within three days. The loans attract an interest rate of 16-24%. It claims to have disbursed over 20,000 loans to more than 13,000 SMEs across 23 sectors.
The company will use the funds to further strengthen its product offering, technological and analytics capabilities, it said in a statement. Lendingkart Group has also signed a Memorandum of Understanding with Fullerton India Capital Company, a wholly owned subsidiary of FFH regarding possible opportunities and initiatives to support their respective businesses.
Lendingkart on funding spree
Last month only Lendingkart raised Rs 30 crore debt funding in the form of NCDs or non-convertible debentures, which are unsecured bonds, from Dutch development bank Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO). Note that, Lendingkart is a non-banking finance company (NBFC) that provides small business loans to SMEs and it is common for lending companies to raise debt funding to replenish their loan books. In the same month (January, 2018) Lendingkart Finance received a debt funding of Rs25 crore from State Bank of India (SBI) to further grow its loan book.
Debt funds are different from equity funds. A debt fund may invest in short-term or long-term bonds, securitized products, money market instruments or floating rate debt. On the other hand, an equity fund is a mutual fund that invests principally in company stocks.
Prior to that, in September last year, the company raised $10.51 million (~Rs 70 Crore) in equity funding in September 2017. It raised $10 million in debt funding in August and another Rs 50 crore of debt fund from Yes Bank and another $12 million debt funding during its B round in June. According to this Livemint report, the company had previously raised an undisclosed amount in debt from DCB Bank Ltd, though it doesn’t specify when this deal took place. In July 2015, it raised $10 million from multiple investing firms and individuals for enhancing its technology stack and firing adding new talent. Lendingkart also raised Rs 3.8 crore in a seed from a cluster of investors in 2015.
RBI regulations
All the digital lending platforms are regulated by Reserve Bank of India (RBI) as NBFCs. The RBI said that these companies will act as only as an online intermediary and not raise deposits. They will not be permitted to lend from its own books and will only act as a facilitator between different parties. Loans taken by a borrower at any point of time, across all P2P platforms, will be capped at Rs 10,00,000. Read more here.
