The start of online gold loans gets $ 35 million from Binny Bansal, GGV

BENGALURU: a five-year startup that helps consumers obtain loans against gold, has raised another $ 35 million in funds from the co-founder of Flipkart, the venture capital firm based in the United States and China, GGV Capital, the Korean KB Investments and Flipkart CEO Kalyan Krishnamurthy backed by Tanglin Venture Partners. The investment will take the valuation of Rupeek, which operates through a model without branches for collecting and delivering gold, to more than $ 300 million.

The new round will bring the total capital raised by Rupeek to around $ 70-75 million, with the first sponsors included and Accel India. The startup is expected to disburse loans of approximately $ 28 million in February and plans to further accelerate the loan portfolio for the year.

The startup will use capital to expand from 10 cities to 30 cities, create a brand, establish a data science team and invest in its hardware product that assesses the quality of gold.

The start-up was created in 2015 by Sumit Maniyar, a chemical engineer from IIT-Bombay who previously co-founded the Function Space educational technology startup in addition to working in companies such as JP Morgan and Religare.

Gold loans serve as an overdraft or credit card for self-employed borrowers or even for a salaried class that cannot obtain the loan amount or have the correct credit score, Maniyar said.

The startup works with banks and NBFCs that are not active or do not have the capabilities in the gold loan segment, taking advantage of their balance to lend. This gives these financial institutes the ability to expand into a market without opening their own branches and networks, while allowing Rupeek to lend at a rate that is 25-40% lower compared to NBFCs, according to Maniyar.

Rupeek also has its own NBFC, which it mainly uses to test new products or launch in new markets, while approximately 95% of the loan portfolio is through its partners.

India's gold loan market is expected to reach Rs 4.61.7 billion rupees by 2022, growing at a compound rate of 13.4%, according to a recent KPMG report. The sector has seen several non-bank financial companies such as Muthoot and Manappuram Finance They have built a loan book of billions of dollars.

I am really excited about the way Rupeek is opening access to formal credit for a large user base. His solid client proposal and his approach to partnering with banks is really a game changer for the unorganized gold lending space in India, said Bansal, who is also creating a $ 300-400 venture capital fund. millions to invest in new companies. Other Batech investments fintech include the general insurance player Acko.