Chinese venture capital fund Shunwei Capital led the round with participation from existing seed investors India Quotient and Mayfield

Upwards Fintech aims for a loan portfolio of $ 13.7 million (INR 100 Cr) for next year

The startup recently launched a pilot project to bring its platform to the Tier II and Tier III markets

Fintech startup based in Mumbai Upwards Fintech has raised $ 5 million in a Series A funding round led by Chinese venture capital fund Shunwei Capital. The cycle also saw the participation of the startup’s existing seed investors, including India Quotient and Mayfield, based in Mumbai.

Fintech plans to use the funds raised to build capacity in technology and data science and expand to more cities.

Founded in 2017 by Nimesh Verma and Abhishek Soni, Upwards Fintech offers fast loans through its desktop website and mobile app to salaried individuals. The platform aggregates user data from different mediums and uses more than 500 data points to build a reliable credit report, the startup said in a statement.

AT Inc42Asked if the platform takes into account the CIBIL score as a criterion for loan approval, Soni replied: “We check a potential borrower’s credit history, but that’s not the only criteria. In fact, we have a proportion of our borrower base in the 580 to 640 score range where conventional lenders have been very hesitant to lend, but our proprietary underwriting algorithms allow us to serve the segment while maintaining quality. healthy wallet.

The startup is present in all key Tier I and II cities such as Mumbai, Delhi, Bengaluru, Hyderabad, Chennai, Jaipur, Pune, Indore, Bhopal, Coimbatore, etc.

Madhukar Sinha, founding partner at India Quotient (IQ), said, “Having seen the microfinance boom in India, I am very excited about the significant market opportunity that Upwards is targeting. IQ is at the initial stage of Upwards, and we’re very impressed with the team and their ability to create a product for the next billion.

According to Soni, conventional underwriting and loan offerings cannot meet the needs of the emerging middle class in India. “We have invested heavily in creating advanced data science-based subscription algorithms to fill this gap,” said the co-founder.

Soni pointed out that 40% of the demand for credit comes from small towns. TThe startup is in pilot mode to penetrate the Tier 2 and Tier 3 markets.

Upwards Fintech is targeting a loan portfolio of $ 13.7 million (100 Cr INR) for next year. The startup claims to have disbursed loans worth $ 549,000 (4 Cr INR) since November of last year. It also claims to have received 4K apps and have an active user base of 250K. Upwards Fintech charges a 2% processing fee on the loan amount and charges an interest rate of 18-32%.

The startup grants loans through Bajrang Investments, a non-bank financial institution. He claims that it has non-productive assets of less than 1%.

Indian online lending space On the fire

FinTech as a sector in India is growing at a rapid rate. Demonetization and the central government’s push for a digital economy has given a boost to Indian fintech startups, and aside from digital payments, online lending is a space on fire. The Indian fintech sector has also attracted the interest of global investors.

Recently, the online loan startup Aye Finance increased his 10th debt financing round by issuing non-convertible bonds. The funding round was led by global impact investment managers Triple Jump BV and MicroVest Funds. The transaction was carried out by Northern Arc Capital (formerly IFMR Capital).

Before that, Delhi based StashFin in partnership with non-bank financing company DMI Finance at raise $ 4.3 million (INR 30 Cr) for subsequent loans through its online platform. The fundraising aimed to increase her portfolio to meet the growing needs of her clients.

Upwards Fintech competes with other major players in the online lending space, in particular Veritas Finance, Lendingkart, Capital Float, Quikrupee, SMEcorner, Innoviti, Biz2credit, FlexiLoans and KredX, among others.

According to a Statistical report, the total transaction value in India’s alternative lending segment stands at $ 241 million in 2018. In addition, the total transaction value is expected to show an annual growth rate (CAGR 2018-2022 ) by 53.3%, for a total amount of Mn $ 1,332.2 by 2022.

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