Mumbai: Fintech startup Indifi has raised ₹145 crore in a Series C equity round led by CDC Group, the development finance arm of the UK government, said a senior executive.
The fundraise comes at a time when domestic lenders have been bogged down by a severe liquidity crunch.
Existing investors. including social impact funds Omidyar Network and Elevar Equity, and venture capital firm Accel Partners, also participated in the round.
“Like all fintech startups, we were also hit by the NBFC crisis, and are the first small and medium business fintech lender to raise external funding in the past year," said Alok Mittal, co-founder and chief executive, Indifi, in a phone interview.
“Raising external capital has been very hard," Mittal said, referring to the liquidity squeeze in the domestic market. Lending startups, both marketplaces, as well as those that lend from their own books, have been struggling to raise funds, after a string of defaults by lenders, including Dewan Housing Finance Corp. Ltd and Infrastructure Leasing and Financial Services Ltd.
While digital lending startup Capital Float had to call off talks with South Africa’s Naspers for a potential fundraise, digital lending marketplace Rubique had to halve its workforce due to scarcity of equity capital.
Founded by angel investor Mittal, along with Siddharth Mahanot and Sandeep Saini, in 2015, Indifi provides loans to small businesses in travel, e-commerce and retail.
Indifi provides loans of ₹1-50 lakh, with an average ticket size of ₹5 lakh, to enterprises that have an annual turnover of ₹50 lakh to ₹10 crore. Along with lending from its own books, it also acts as a marketplace, to lend to businesses by tying up with other lenders.
It currently has ₹300 crore of assets under management.
After it lends in a particular sector, with a successful outcome and data to back its investment, Indifi ties up with lenders, such as RBL Bank, Lendingkart and InCred Finance, to offer loans to other businesses in the same sector.
“We plan to use the funds raised to increase the share of the marketplace mode, which currently contributes about half of our business. We will also look to lend to newer sectors, such as trucking and logistics, where growth capital is needed," Mittal said.
New investor CDC has also been active in the Indian market in recent times, with direct investments in startups, such as online grocer BigBasket, as well as in venture capital and private equity funds such as Lighthouse Funds.
Mint reported on 23 July that CDC plans to double its exposure to India with investments of up to $3-3.5 billion by 2021. About 30-35% of its overall portfolio dedicated to India, focuses on seven core sectors, including financial services, infrastructure, healthcare, affordable housing, food and agriculture, and consumer and education, for direct investments.