U Gro Capital, a lending tech startup is reportedly, planning to raise INR 100 crore from Flipkart co-founder Sachin Bansal and the Poonawala family. The firm U Gro Capital will use the funds to expand its businesses at a time when capital is scarce for the sector, cited Inc42.
The agreement, reportedly, is set in two separate securitisation and bond deals. While, U Gro has done the first securitisation transaction with Poonawalla Finance, part of the Poonawalla family. Further, Sachin Bansal entered into a non-convertible debenture deal with U Gro.
Shachindra Nath, chairman and MD of U GRO Capital said that the entry of high-profile investors will enable the firm to attract more capital in the future.
“These transactions demonstrate our ability to securitise our book at an early stage of our development and establish that besides conventional term–financing, we have the ability to raise resources from alternative channels as well,” Nath further added.
U GRO Capital is a BSE-listed, technology-focused, small business lending platform. The company is focused on addressing the capital needs of small businesses operating in eight sectors by providing customised loan solutions.
The eight sectors are healthcare, education, chemicals, food processing / FMCG, hospitality, electrical equipment and components, auto components, light engineering.
As per report, the credit demand in India is projected to be worth $1.41 trillion by 2022. The estimated growth rate in credit demand is 3.73% between FY17 and FY22.
Between 2015 and Q1 2019, the total investment in Indian fintech startups was $7.62 Bn with a total deal count of 478. Out of the total funding, 25.49% ($1.94 Bn) was in lending tech startups.