India’s PhoneParLoan raises funding from early-stage investor MOX

A woman holds an iPhone in her hands. Photo: Priscilla Du Preez

Indian fintech startup PhoneParLoan, which connects customers to lenders primarily in tier II and III cities, has raised an undisclosed amount of funding from accelerator MOX, its co-founder Ashwin Bhambri told DealStreetAsia.

MOX is operated by SOSV, a US-based venture capital firm with over $700 million under management. The PhoneParLoan investment marks SOSV’s second capital infusion in the startup currently valued at $7 million. It earlier invested in the startup in January 2019, along with a slew of Japanese and Chinese investors. Prior to that, the company also garnered funding from a few angel investors.

Although the current investment figure is small, it highlights a growing market in India for online lenders to cater to salaried individuals across the country.

PhoneParLoan, which literally means a loan on a phone, doles out short tenure microloans in the range of Rs 1000 to Rs 10,000. According to estimates available, there are currently as many as 300 million low-and-middle-income salaried workers who often feel a cash crunch during the end of the month and need micro-credit to pay for their basic expenses such as groceries and bill payments.

The short tenure credit market in the country, Bhambri said, currently stands at Rs 70,000 crore and is expected to grow at 14 per cent year-on-year.

PhoneParLoan, established in 2015 under parent firm Millennial Card Technologies, addresses this contactless lending sector. For retail borrowers, it unifies the loan application process wherein it creates a single loan application on its platform that is accepted and consumed through APIs of multiple lenders.

The benefit for the lender – be it a fintech startup, a non-banking finance company (NBFC) or a bank – lies in its getting access to a pool of ready-to-disburse customers with all details at a zero-acquisition cost. PhoneParLoan also claims to have an alternate data credit scorecard for the new-to-credit or thin file users that can be used by multiple lenders for credit decisions.

Other startups operating in the segment are Creditbazzar.com and QuickCredit.in, among others.

The corpus raised will help PhoneParLoan spruce up its technology, ramp up headcount and expand its operation, said Bhambri. “The idea is to reduce the friction between consumers and lenders,” he added.

“The profit-participating loan application is quite unique as it is complementary to both the borrower and the lender.  India is the best testing ground for such a product and has global scalability,” said Anand Kumar, a corporate lawyer with Pier Counsel, who has invested in the startup in his personal capacity.

New Jersey-based SOSV is no stranger to the burgeoning Indian startup ecosystem. According to media reports, it has made 20 investments in India over the past three years and has plans to clinch at least 15 deals over the course of this year.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.