Avail Finance, a Bengaluru-based online lending startup, has raised an undisclosed amount of funding led by Matrix Partners India and a cluster of individual investors, the company said in a statement on Wednesday.
In addition to Matrix Partners India, Ola co-founders Bhavish Aggarwal and Ankit Bhati, Flipkart co-founder Binny Bansal, Freecharge founder Kunal Shah, and founder and CEO of Mswipe Manish Patel participated in the round.
Avail Finance has raised a total of $17.2 million till date, which includes debt and credit lines from multiple non-banking financial institutions (NBFCs) and other investors.
According to Ankush Aggarwal, chief executive officer, Avail Finance, money raised via credit line will be used for lending, and money raised from investors will be used to upgrade Avail Finance’s tech capability and for hiring new talent.
Founded by Ankush Aggarwal and Tushar Mehndiratta in February 2017, Avail Finance targets blue collared workers in India, who according to the company are underserved by lending institutions like banks.
The market that the company targets has less or no credit card penetration and there is a lack of structured credit history to identify potential borrowers. The company said that a large segment of the Indian population resorts to availing credit from informal sources at high interest rates instead.
Aggarwal said the company partners with business firms that employ blue collared workers to source potential borrowers. Till date, it has disbursed loans to around 4,000 borrowers and the average loans size is around Rs20,000.
The startup claims to leverage alternate forms of parameters sourced from companies it works with, to underwrite loan applications. It also uses India Stack’s integration to find borrowers, the company said in a statement.
India Stack is a set of open application programming interfaces (APIs) that allows governments, businesses, startups and others to provide paperless eKYC, and to identify customers.
“By solving the core of the problem in not having a credit history, using advanced technology, data sciences and artificial intelligence, we are bringing a new approach to an age-old problem. The huge chunk of people in the urban mass who are currently being ignored by the formal lending sector will stand to benefit from Avail’s solutions,” said Aggarwal in a statement.
This article was first published on Livemint.com