India’s Indifi raises $20.4M to expand its online lending platform

Published August 5, 2019

Indifi, a Gurgaon-based startup that offers loans to small and medium-sized businesses and also operates an online lending marketplace, has raised 1,450 million Indian rupees ($20.4 million) in a new financing round to expand its business in the country.

The Series C round for the four-year-old startup was led by CDC Group, a U.K.-government-owned VC fund. Existing investors Accel, Elevar Equity, Omidyar Networks and Flourish Ventures also participated in the round, the startup announced on Tuesday (Indian Standard Time).

Indifi, which has raised about $34 million in venture capital to date, has also relied on debt to grow and finance loans on its platform. Currently, it’s in about $21 million in debt, Alok Mittal, co-founder and managing director of Indifi, told TechCrunch in an interview.

Indifi, which itself finances some loans, additionally also serves as a marketplace for banks and non-banking financial companies to participate in funding loans to small and medium-sized enterprises, said Mittal. Both the businesses are equally growing and contributing to its bottom line, he said.

A typical loan processed by Indifi is of about $7,000 in size. Overall, the startup offers between $1,400 to $70,000 in capital to businesses.

Unlike banks and many other online lenders, Indifi works with an ecosystem of companies to assess risk factors before granting a loan to a business, Mittal said. For instance, Indifi works with food-delivery startups Zomato and Swiggy and checks a restaurant’s history and feedback from their customers before issuing to a restaurant.

Similarly, if an enterprise from the travel industry were to look for a loan, Indifi checks the volatility of the market. Some of its other business partners include Oyo Rooms, MakeMyTrip, Flipkart, FirstData, Travel Booking and Riya Travel.

“We chose to invest in Indifi because of its advanced data-driven approach that enables it to reach [thousands] of underserved customers across India. By reducing the high cost of risk assessment and customer acquisition, Indifi helps formal and informal businesses to access growth finance that otherwise may not receive it,” Srini Nagarajan, managing director and head of CDC Group’s Asia business, said in a statement.

Despite its longer background check process, Mittal said Indifi has been able to finance nearly 50% of all the applications it gets, compared to about 10% deals that materialize with banks and other lenders.

Indifi, which spent the first year and a half of its existence building relationships with major companies and refining its products, has amassed more than 15,000 customers to date, Mittal said. Its client base has grown by 2.5 times in the past year, he said.

The startup will use the fresh capital to find new clients and lending partners to expand its marketplace business, Mittal said. It will also explore lending to businesses in more sectors, including logistics (so fleet-owners could also get loan).

Indifi competes with a handful of businesses, including Bangalore-based Zest Money, Five Star Finance, Capital Float and, in some capacity, Drip Capital, which recently raised $25 million.

Grocery startup BigBasket becomes India’s newest unicorn with new $150M investment

Published May 6, 2019

India has a new unicorn after BigBasket, a startup that delivers groceries and perishables across the country, raised $150 million for its fight against rivals Walmart’s Flipkart, Amazon and hyperlocal startups Swiggy and Dunzo.

The new financing round — a Series F — was led by Mirae Asset-Naver Asia Growth Fund, the U.K.’s CDC Group and Alibaba, BigBasket said on Monday. The closing of the round has officially helped the seven-year-old startup surpass $1 billion valuation, co-founder Vipul Parekh, who heads marketing and finances for the company, told TechCrunch in an interview. Chinese giant Alibaba, which also led the Series E round in BigBasket last year, is the largest investor in the company, with about 30% stake, a person familiar with the matter said.

The company, which offers more than 20,000 products from 1,000 brands in more than two dozen cities, will deploy the fresh capital into expanding its supply-chain network, adding more cold storage centers and distribution centers to serve customers faster, Parekh said. The company also plans to add about 3,000 vending machines that offer daily eatable items, such as vegetables, snacks and cold drinks in residential apartments and offices by next month, he added.

Infusion of $150 million for BigBasket, which raised $300 million last year, comes at a time when both Walmart’s Flipkart and Amazon are increasingly expanding their grocery businesses in India.

Amazon Retail India, which operates Amazon Pantry and Prime Now services and has a presence in mire than 100 cities, is reportedly planning to expand its business in India. Flipkart Group CEO Kalyan Krishnamurthy said in an interview with the Economic Times last month that the e-commerce giant may pilot a fresh foods business soon. Last week, Flipkart was said to be in talks to acquire grocery chain Namdhari’s Fresh.

Parekh largely brushed off the challenge his company faces from Flipkart and Amazon at this stage, saying that “it is a very large market, and it is unlikely to be dominated by one single company for the simple reason of its complex nature.” Flipkart and Amazon may eventually get serious about this space, but so far their play with groceries is mostly an additional differentiation checkpoint, he said.

“The success in this business requires having the ability to build and manage a very complex supply chain across multiple categories such as vegetables, meat and beauty products among others. Our focus has been on building the supply chain, and also ensuring that we are able to deliver a very large assortment of products to consumers,” he added. He said BigBasket today offers the largest catalog and fastest delivery among any of its rivals.

Besides, BigBasket, which is increasingly growing its subscription business to supply milk and other daily eatables, is also inching closer to becoming financially stronger. Parekh said BigBasket expects to become operationally profitable in six to eight months. “The idea is that business by itself does not consume cash. If we use cash, it will be for investment in new businesses or scaling of existing businesses,” he said.

India’s retail market, valued at mire than $900 billion, is increasingly attracting the attention of VC funds. Since 2014, online retailers alone have participated in more than 163 financing rounds, clocking over $1.38 billion, analytics firm Tracxn told TechCrunch. More than 882 players are operational in the market, the firm said.

The challenge for BigBasket remains fighting a growing army of rivals, including hyperlocal delivery startups including Grofers, which raised $60 million earlier this year, unicorn Swiggy and Google-backed Dunzo, which is increasingly becoming a verb in urban Indian cities.