Bengaluru-based Rupeek, which operates an online marketplace for gold loans, raised $30 million in a funding round led by investment firm Bertelsmann India. Existing investors Accel and Sequoia Capital India also participated in the round.
The fresh funds, which will be infused in two tranches, will be used towards product development and market expansion, the company said in a statement on Monday.
“We would like to bring transparency in the lending space and protect retail investor interest at all costs. We will be using our proprietary tech hardware to ensure standardization, fairness, and scalability in gold purity assessment. The investment will also help us rapidly scale across new markets," said Sumit Maniyar, founder and chief executive, Rupeek, in a statement.
Rupeek is currently disbursing gold loans at an annual run rate of more than $150 million and is growing 20% month-on-month. The organized gold loan disbursal in India was estimated at $90 billion per year, the company said. India currently holds 27,000 tonnes of gold worth more than $1 trillion, out of which only 6-7% is monetized through the organised market. The unorganized market is estimated to be three times the size of the organized gold loan market.
India currently imports 750 tonnes of gold annually without contributing to the GDP multiplier as most of the imported gold sits idle in the form of jewellery. Rupeek believes that gold loans can be an effective gold monetisation mechanism.
“Gold is integral to the Indian way of life and monetization of gold assets in the country represents a massive opportunity. Rupeek is perfectly poised to capitalize on this unique opportunity based on its innovative business model," said Anand Daniel, partner at Accel.
“The belief that Rupeek was uniquely positioned to disrupt the gold loan market is what led to Sequoia India’s early partnership with them", said G.V. Ravishankar, managing director, Sequoia Capital India. “Their efficient use of technology to scale the credit evaluation and disbursement process has resulted in over 10x growth in the last 12 months. Today, their business model is contributing significantly towards creating a strong value proposition for banks to provide credit access to small businesses at affordable rates," he added.
Started in 2015 as an asset-backed lending marketplace, Rupeek leverages technology to operate with a branchless model. Offering a 30 minutes doorstep service for gold loans, Rupeek’s platform offers on-demand pickup and return of the valuables.