Matrix Partners India announced today that it has invested in the fin-tech startup ZipLoan. ZipLoan is a technology enabled NBFC that provides small ticket business loans of up to INR 5 lakhs to micro enterprises and SMEs. The funds will be used to expand the team, enter new geographies and enhance Ziploan’s technology platform. Existing investors Sarbvir Singh (former MD, Capital 18), WaterBridge Ventures and Whiteboard Capital also participated in this fund raise.
SMEs are underserved by traditional lenders as they are costly to reach and data availability to risk assess them is scarce. Currently operational in Delhi and Indore, ZipLoan uses its proprietary risk assessment engine with digital data points, called ZipScore, to automate credit decisions. It has also developed its proprietary Loan Lifecycle Management product leading to one of the lowest operating costs in the industry and turn-around time of only 4 days from application to disbursal. ZipLoan has also partnered with IDFC Bank to provide loans to first time borrowers, thus bringing small businesses into the organized finance architecture. It also has debt partnerships with leading NBFCs such as IFMR Capital and Essel Finance resulting in a highly profitable and capital efficient model at scale.
Commenting on the investment, Kshitij Puri, Co-Founder and CEO, ZipLoan, said, “Providing credit access to small businesses is the holy grail of lending which most financial institutions haven’t been able to solve. We are excited to partner with Matrix Partners in our mission to simplify access to capital for these businesses.”
Shalabh Singhal, Co-Founder and COO, ZipLoan, added, “The investment from Matrix would help us further invest in automation and in improving our credit scoring algorithms. We envision ZipScore establishing itself as the industry standard SME credit risk assessment tool in the years to come.”
“With 40 million SMEs, SME-lending is a large opportunity, but with tough execution challenges. We believe a cautious, technology-led approach can bring down underwriting and sourcing costs enough to serve the SMEs at smaller ticket sizes. We are impressed by ZipLoan’s approach to solving this problem and are privileged to partner with Kshitij and Shalabh on their journey. We believe it’s still early days of the India Fin-tech story and will continue to invest in the space”, said Vikram Vaidyanathan, Managing Director, Matrix India.