Start-ups focused debt firm Alteria Capital has infused Rs 80 crore in digital lending firm Lendingkart. In a statement issued on Sunday, the Mumbai-based debt fund company said that the investment was made in the non-banking financial arm of Ledingkart, in the form of venture debt. This also marks the largest deal by the company.
Alteria Capital, which competes with InnoVen Capital and Trifecta, is one of the leading players in India’s venture debt market. The firm launched in 2016 and is investing from a 1,000-crore fund, of which it has raised Rs 625 crore.
In a short time, Alteria Capital has backed a large number of mid-tier start-ups such as Faasos, Portea Medical, Raw Pressery, Vogo Bikes, Dunzo, Mfine, Zest Money and Stanza Living, among others. Its typical cheque size is Rs 5 crore Rs 80 crore.
“The last few quarters have witnessed a lot of volatility in the NBFC space but the companies which have robust underwriting platforms and a strong equity cushion have been able to turn this into an opportunity for growth. While liquidity has not been easily available for the broader market, Lendingkart has grown sharply during this phase,” said Vinod Murali, managing partner, Alteria Capital.
Lendingkart is part of a new group of start-ups that includes Capital Float, Neogrowth and IndiaLends, that offer small ticket-size loans, mostly unsecured credit, to borrowers with limited credit history.
The company operates through two divisions- a non-banking financial entity, Lendingkart Finance, and technology support arm, Lendingkart Technologies. The company focusses on small and medium enterprises (SMEs) with the ability to service deals pan-India.
To support the NBFC business, the start-up raises debt from the market on an on-going basis. Some of its investors include Yes Bank Ltd and Aditya Birla Financial Services, among others. Lendingkart has also taken debt from the State Bank of India, in what is the first such deal in a digital lending start-up by the state-owned bank.
Most of the equity is infused in Lendingkart technologies which owns the credit underwriting intellectual property. In February last year, the company has closed $76 million (a little less than Rs 500 crore) in series-C funding led by Fullerton Financial, the wholly-owned subsidiary of Temasek Holdings, and some of its existing investors. Other investors in the firm include Sistema Asia Fund, Bertelsmann India Investment, Mayfield India, Saama Capital and India Quotient.
"MSMEs have traditionally faced huge hurdles in growing their businesses. Our goal at Lendingkart is to help them succeed by fulfilling their financial needs. The funds raised will be used to grow our ability to service the MSME community across the country and bring them into the financial mainstream," said Lendingkart’s co-founder and chief executive, Harshvardhan Lunia.