Venture capital fund Matrix Partners India on Tuesday announced that it has invested in the fin-tech start-up Finomena. The start-up was founded by a team of IIT and Stanford graduates. The amount raised has not been disclosed by the investor and by the company.
Riddhi Mittal, co-founder of Finomena, said in a statement that Finomena is disrupting how capital should be disbursed and collected.
"We decided to partner with Matrix Partners India as we believe they share our vision and will give us the necessary edge to win in this market,” he said.
Matrix believe in the founders’ approach to solving tough problems and product-tech capability. "Fin-tech is a focus area for Matrix and we will make multiple investments in the space,” said Vikram Vaidyanathan, managing director, Matrix Partners India, in a statement.
Select entrepreneurs and angels also invested in this round of funding. They include Kaushal Aggarwal, MD and co-founder of Avendus and Harshvardhan Chamria of Magma Fincorp, along with other leading entrepreneurs and angels.
The founders also worked with Facebook, Microsoft, Boston Consulting Group and Bain Capital.
Finomena uses alternate data sources and proprietary algorithms to evaluate credit-worthiness of borrowers such as college students or young working professionals. This enables borrowers to purchase aspirational phones, laptops and other consumer electronics online by opting for easy instalments or financing options.
“India is a credit starved country. True financial inclusion will only come by use of mobile technology at mass scale. We believe we can use the power of machine learning algorithms and the digital footprint being created by each person today to evaluate their credit risk more holistically, thereby creating a win-win situation for the entire ecosystem,” said Abhishek Garg, co-founder of Finomena.
A company statement says “Most banks and NBFCs do not cater to this segment due to lack of appropriate credit history and high operational costs. Finomena has re-thought the entire process end-to-end so that disbursing such loans at scale is viable.”