Binny Bansal, GGV Capital lead $60 mn funding in Rupeek

Rupeek Fintech Pvt. Ltd, which operates an online marketplace for gold loans, has raised $60 million across two rounds, the company said on Tuesday.

The new investors include Flipkart co-founder Binny Bansal and GGV Capital, a backer of China’s Alibaba and Didi Chuxing, besides Tanglin Venture Partners and KB Investments. Existing investors, Sequoia and Accel also participated in the rounds.

Rupeek offers gold loans at the customer’s doorstep and completes the loan underwriting-to-disbursal process within 30 minutes. By cutting down on expenses with an online-only strategy, Rupeek offers gold loans at an interest of 0.89% per month.

It currently processes loans worth $28 million every month, CEO Sumit Maniyar said over the phone. “We will use the funds to invest in technology—to integrate more with lenders—where we talk to their core banking solution, and digitise the transaction from end to end with checks and balances.”

The technology will also help onboard customers, as well as create a data layer and help ascertain credit scores for customers better, he added.

While Rupeek has a non-banking financial company (NBFC) licence, it primarily lends through its banking partners and not from its own book. “We lend from our book only when we want to experiment—try out a new market or product, and don’t want to expose partner banks immediately,” Maniyar said.

Indians have stocked an estimated 23,000 tonnes in gold and almost 40% of this is in South India alone, according to a 2018 KPMG India report. NBFCs, such as Muthoot and Manappuram, command 81% of the organized gold loan market, while other unorganized players, who are mostly unregulated, control 40-60% of the gold transactions in India, the KMPG report said.

The deal also underlines Silicon Valley-based GGV Capital’s growing interest in Indian startups, marking its fourth deal in the last six months. It has invested in business-to-business marketplace Udaan, small business accounting startup Khatabook, and online learning firm Vedantu.

“For India’s middle-class households, gold has long been a favourite way to save and invest. Rather than letting it sit idle, Rupeek has turned a family’s dormant asset into an easy way to get a loan at affordable rates to grow their small businesses or pay for emergency needs,” said Hans Tung, managing partner, GGV Capital, in a statement.

Rupeek clarified that Bansal has invested in his personal capacity, and not from the fund that he is reportedly raising. The Times of India had reported on 9 September that Bansal is raising a $300-400 million fund.

Bansal, an active angel investor, has backed health-tech startup SigTuple, news aggregator InShorts, and robotics startup GreyOrange, among others. He is also a large shareholder in digital insurer Acko.

“I am really excited about how Rupeek is opening up access to formal credit for a large base of users. Their strong customer proposition and approach of partnering with banks is truly a game changer for the unorganized gold loans space in India,” Bansal said in a statement.