has raised $12.3 million in funding
led by Sequoia Capital
as it looks to build technology to seamlessly deliver small loans to individuals in partnership with banks. The series A funding
round also saw the participation of Silicon Valley-based investor NEA and existing investor Prime Venture Partners.
targets salaried individuals earning upwards of Rs 20,000 every month and evaluates within a few minutes if they're eligible to avail a line of credit
of up to Rs 5 lakh. The company uses a customer's credit
score, transaction history and other data that is fed into proprietary algorithms to decide on behalf of the bank if the borrower is a safe bet.
"We are uniquely placed wherein we sit on top of banks and NBFCs. After downloading our app a consumer can within five minutes know if they are eligible for borrowing credit.
They can then complete the KYC formalities on their phone and can borrow any amount under the limit they are eligible for," said Bala Parthasarathy, co-founder and CEO of MoneyTap.
The firm plans to use the raised capital to beef up its technology offering. It wants to build a better front end in order to make it a lot more seamless for customers to use its service, and more robust algorithms to predict whether a customer is a good bet to give credit
to. A chunk of the money will go into hiring manpower for a new data sciences team.
Parthasarathy says one of the company's unique strengths is being able to work with banks and integrating its own system with theirs, a task several startups do not have the bandwidth to do. However, he remains cautious of not spending too much of MoneyTap's time and resources in integrating with every banking system, saying it is better to have fewer partners who they can work with more closely.
in India is highly underpenetrated and is a complex problem to solve. MoneyTap
combines an experienced team with a thoughtfully designed product and their strong early traction is a testament to the efficacy of their approach to address this massive market opportunity," said Abheek Anand, Principal at Sequoia Capital
has set itself a target of issuing credit
worth Rs 300 crores by the end of the current fiscal. While currently partnered with only RBL Bank, the company says it in advanced stages of signing up others. By the end of the year, Moneytap
will have six different borrowers for and will expand its reach to 50 cities across the country.
Since its launch in September last year, the company claims to have got over 300,000 downloads for its app who on average earn between Rs 30,000-40,000 per month and are aged between 28-32 years. MoneyTap
makes money on a revenue share basis with banks when they give out loans, but says they are more than happy to do so because it opens up a new line of business for them.