Mumbai: Lending start-up Ftcash has raised ₹50 crore in a Series A round led by two new investors — Dutch development finance institution FMO, and Accion International, a US-based non-profit investor focused on fintech start-ups — a senior executive told 'Mint'.
Its existing investor, homegrown venture capital fund IvyCap Ventures, also participated in the round. It last raised an undisclosed amount in its pre-series A round in June 2017 from IvyCap and 500 Startups, a Silicon Valley-based early-stage venture capital fund.
Ftcash currently acts a platform for lenders and small businesses. While it does not lend from its own books, it ties up with larger lenders such as non-banking finance companies (NBFCs), and is responsible for sourcing and due-diligence, and uses technology to evaluate borrowers such as small businesses with a turnover of ₹5 lakh to ₹50 lakh, according to Sanjeev Chandak, founder and CEO of Ftcash.
Founded in 2015 by Chandak, Deepak Kothari and Vaibhav Lodha, the start-up lends around ₹3 lakh on an average to small businesses such as grocery stores and mom-and-pop outlets. It has around 30,000 customers (borrowers) currently, and expects a 10x growth in the number of customers in the next 12-18 months, Chandak said.
Lending start-ups, which operate either as marketplaces and facilitators, or lend from their own books, had faced difficult times getting money to lend late last year. Domestic NBFCs, which saw the fastest credit growth in the past few years, were weighed down by a severe liquidity crunch after defaults by Infrastructure Leasing and Financial Services Ltd (IL&FS) in September. Loan disbursals slowed amid pressure on balance sheets as NBFCs struggled to repay short-term loans.
Post the crisis, a number of fintech start-ups, including lenders Lendingkart and Capital Float, as well as marketplace Rubique, are returning to the market to raise equity funding, Mint reported on 4 April.
Chandak said the liquidity crisis affected Ftcash only moderately, with lending volumes not being affected much.
Founded in 1970, FMO has a committed portfolio of 9.2 billion euros, with investments in more than 85 countries supporting sustainable private sector growth in developing and emerging markets by investing in businesses, projects and financial institutions.
'We are extremely excited about FMO and Accion joining us in Ftcash. We have been a part of Ftcash's journey from the beginning and the company has grown from strength to strength. There is tremendous potential in the small and micro lending segment, and Ftcash is well positioned to be a leading player, with its proprietary algorithm and end-to-end customer relationship," according to Vikram Gupta, founder and managing partner, IvyCap Ventures.
IvyCap is currently investing from its ₹550-crore second fund. It has backed startups, including online jewelry retailer Bluestone and goods rental marketplace GrabOnRent, and is currently raising two funds — a venture debt fund of ₹500 crore and an angel fund of ₹60 crore.