Mumbai-based digital lending platform, SMECorner has raised $7 million in a mixed round of equity ($3.3M) and debt ($3.66M) from non-banking financial company Capital First with participation from existing investor Accion Ventures, and a clutch of high net worth individuals.
The transaction is expected to be completed within the next 15 days.
In January this year, IDFC Bank had agreed to acquire GIC and Warburg Pincus-backed Capital First in a share-swap deal valued at about $1.5 billion. Reserve Bank of India approved the merger earlier this month.
SMECorner plans to use the funding to scale its loan book by expanding on its offline branches and honing its technology platform. “We want to grow our loan book to about Rs 400 crore by the end of FY19 and to Rs 1,500-2,000 crore by FY20. This partnership will help us achieve that scale even as we are in talks with a few B2B platforms to enable loans for their participant vendors thus helping us scale our customer base too,” Samir Bhatia, founder and CEO, SMECorner said.
Following the deal, SMECorner will get direct access to Capital First’s debt pool for scaling its operations. Besides, the loans originated by the company will be booked on Capital first’s books with a risk-share agreement in place for which it will get a service fee for the loans.
Started three years ago, SMECorner enables small and medium enterprises to access loans from banks and NBFCs. Pivoted to NBFC from a marketplace model, having received its licence from RBI in February this year, SMECorner claims to have about 700 customers on its loan book and so far disbursed around Rs 45 crores.
SMECorner offers loans at interest rates of 19-26 per cent depending on the size of loans, an average of which is about Rs 6 lakh.
The company aims to grow its loan book to about Rs 400 crore by the end of FY19 and to Rs 1,500-2,000 crore by the next fiscal year. Also it is targeting to expand the client base to 5,000 by the end of this financial year
In May 2017, SMEcorner had raised an undisclosed bridge round of funding from a Dutch government fund.
SMECorner competes with players like Finomena, KrazyBee, SmartCoin, Buddy, Onemi, and Quicklo among others in the microlending space. Other startups operating in the lending space are Capital Float, LendingKart, CoinTribe, Cash Suvidha, Creditas, etc.