Home / Companies / Start-ups /  Credit Wise Capital raises $6 million from family offices, angels

Credit Wise Capital (CWC), a consumer finance NBFC raised $6 million in its seed funding round. The round saw participation from angel investors like Ajay Goel, Stanford Business School alum and serial investor, Anuj Golecha, founder of Venture Catalysts, Gaurav Gandhi, director at EssGee group, Anup Agarwal, director of Shanti Group among others.

The company that disburses two-wheeler loans intends to use these funds to grow its dealer network, increase geographical expansion, improve collection technology and underwriting models.

Founded by Hirak Joshi and Aalesh Avlani, CWC aims to disrupt the two-wheeler lending ecosystem by blending traditional lending with new-age fintech data science.

“Tech is an enabler and not a panacea for all the ailments. Technology cannot convert a delinquent customer into a good one," said Hirak Joshi, co-founder of CWC.

Currently, present in Mumbai and Pune, CWC has an active dealer network with over 100 dealers and has disbursed 12,000 two-wheelers in a span of 16 months with an average ticket size of 65,000. The company has been able to onboard debt partners like AU Small Finance Bank, Hinduja Leyland Finance and Vivriti Capital.

“We were impressed with the systems and processes that CWC have built. The razor-sharp focus on cost reduction to achieve scalability in this business was one of the primary reasons for our investment in Credit Wise Capital," said Mayank Shah, Chairman of M.J. Shah Group and the lead investor of CWC.

The Indian two-wheeler industry is expected to grow at 8% CAGR over the next 5 years. With rising two-wheeler costs and reducing purchasing power capabilities due to covid, the need for finance is set to increase. The average Indian’s dependency on a two-wheeler is also expected to accelerate with the reluctance to travel in public transportation due to the current pandemic.

CWC’s focus is on collection by deploying the right mix of human capital and tech processes while keeping a major check on the costs. The current technology helps bridge the gap of rising underwriting and collection costs. CWC claims it is different from its competitors as it focuses on deploying technology for collections and on pre-delinquency management by initiating collection effort even before the first presentation. This along with dedicated focus on amicable solution management with customers has been instrumental in keeping NPA at a minimal at CWC.

The collection process begins from the moment the customer takes the loan, with constant tracking and reminders regarding the due date. “At CWC, the endeavour is to bring complete transparency and enhanced choices for the customer. Dynamic and risk-adjusted pricing, easy to understand offerings and constant customer engagement are the key aspects of this strategy followed at CWC," added Joshi.

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