KNAB Finance Advisors, a fin-tech firm that provides unsecured working capital loans to SMEs, has raised over ₹2.5 crore in two funding rounds. The development was first reported by VCCircle.
The funding comes from InCred — a non-banking financial company (NBFC), along with a cluster of individual investors. The two funding rounds also witnessed participation of Mindtree executive chairman Krishnakumar Natarajan and Sharjah Islamic Bank’s senior vice president Ravi Bhardwaj.
While the company was founded in 2015, it received its licence to operate as a non-deposit-taking NBFC in October 2016. KNAB’s co-founders include Mandeep Chaudhary, Vineet Gupta, and Thomas Varghese.
Commenting about the competition in the digital lending space in India, Mandeep Chaudhary, CEO of the company, said,
There is a huge dearth in the SME lending space in India. China has been able to grow because credit is easily available to SMEs, unlike in India. As an institution, one can give around Rs 1,000 crore, which is peanuts for an ocean like India.
Even after securing required license to start business, the company delayed its operations for two months and started disbursing loans in January this year. The decision to delay the operations was taken after government announced demonetization of high-value currency.
Within months of starting operation, the company claims to have disbursed loans worth over ₹10 crore so far. The average ticket size for the loan ranges up to ₹6 lakh. It is also offering short-term loans which allows customers to close it under a month. A few of the company’s partners include Treebo Hotels, Paytm and M-Swipe, among others.
Earlier this month, InCred invested in another digital lending startup — DigiLend, which secured ₹2 crore. It has invested in several other fin-tech startups for around 10-15 percent stake.
The finance technology has become the hottest sector right now for Indian markets and money keeps coming in. As per the report, around 25 fin-tech startups have raised funding in this year so far. The fin-tech space covers markets such as payments, lending, insurance and personal finance.