You might be aware of various small scale startups that have lately taken birth in our country. The passion for entrepreneurship has grown significantly in recent years. They have great innovative ideas and a vision to develop our nation towards higher welfare. Even the youngest people have come up with the most creative ideas. However, many of them lack the proper funding and have to struggle a lot to become financially independent. Because of this same reason, many incredible ideas are not properly executed. Imagine how developed our country would be if all these plans could be suitably ascertained. Lendingkart is a company that was established with this precise vision.
Lendingkart (1) is a digital lending platform based in Ahmedabad which provides financial assistance to small and medium enterprises in the pie country. It was founded in 2014 by HarshVardhan Lunia and Mukul Sachan. Lendingkart helps both online and offline enterprises by providing loans ranging from 50,000 rupees to ten lakh. It is made possible using their partnerships with brands like Flipkart, Snapdeal, Craftsvilla, Voonik, Paytm, etc. It is well known in cities such as Delhi, Mumbai, Bengaluru, Chennai, and Ahmedabad. They have also defined their brand name across all 29 states and union territories in India. Lendingkart now has offices in Bangalore, Delhi NCR, Kolkata, and Mumbai apart from Ahmedabad. By 2019, they had received a total of five lakh applications and have submitted more than 76,000 loans. Lendingkart has more than 300,000 fans on Facebook and 391 followers on Twitter.
The co-founder and CEO of Lendingkart is HarshVardhan Lunia, a Chartered Accountant by profession and an alumnus of ISB Hyderabad. He had been working as a banker while discussing the idea of Lendingkart with Mukul Sachan. Mukul graduated from IIM Bangalore and has been a scientist at ISRO. They realized that small and medium enterprises (SMEs) in Indian required a significant financial boost to start up their businesses. HarshVarshan was particularly moved by the determination and passion of small firms which fought hard to stay in the market.
He knew that the country had a lack of monetary aid which hindered these enterprises from bringing their innovative ideas into life. If the SMEs had a reliable source of income, they could work on improving their technology and functioning instead of being concerned about the funds. The company soon began a partnership with many famous online brands to find adequate sources. The small businesses could apply for loans through the Lendingkart website. All they are expected to do is upload the necessary legal documents and background data. The entire application process takes only a couple of minutes and can be done effortlessly.
Lendingkart has a subsidiary non-banking financial company (Lendingkart Finance) which verifies the documents and transfers it to an analytics division. The records are analyzed, and they quickly deduce the purpose of the applicants to pay back the loan sum. Their highly efficient data analysis technology finds information about the business from various sources to make an accurate assessment. However, they do not judge the applicants based on their previous financial records of loans and tax returns. Their primary concern is the current business growth, cash flow, and revenue pattern of the client. The lenders can quickly know the credibility and worth of the borrowers, thus providing complete transparency. The financial company, formerly known as Aadri Infin Ltd, works on sharp technology and the loans are usually delivered within 72 hours of the application. They have improved the convenience for the enterprises to access funding easily.
Funding and investments
The major investors in Lendingkart are Mayfield India, Darrin Capital Management, Saama Capital, Bertelsmann India Investments, Sistema Asia Fund, Indian Quotient etc. The series A round of funding was conducted in July 2015 and they raised 10 million dollars. A year later, they led a series B round which brought up 32 million dollars. This round was led by Bertelsmann Indian Investments and Darrin Capital Management. The enormous amount of investments was proof of people’s trust in Lendingkart’s vision.
The company used this investment to improve its data science team further and develop the company’s possibilities. The technology platform was enhanced, and they came up with a better infrastructure to develop mobile capabilities. A series C round of funding was led by Lendingkart in September 2017 and they raised 6.9 lakh rupees with the help of Bertelsmann India Investment. In 2018, another series C funding round was conducted in February 2018 which brought up 87 million dollars. The major investor in this round was Fullerton Financial Holdings.
A couple of series D rounds of funding were also conducted in August 2019 and May 2020 respectively. It raised a total of 530 crore rupees. Lendingkart has announced that the latest funding will be used to expand its services to more cities and smaller enterprises that are in need of the allowance. They are also building their technical and analytical potential.
Latest news regarding Lendingkart
As a result of COVID-19 and the ensuing lockdown, we know that everything has come to a standstill. Since most small and micro enterprises have put their business on hold, it has directly affected many NBFCs too. The loan disbursements of Lendingkart has been paused, and this has had a significant impact on their revenue. They had no choice but to cut down on their workforce expenses. As of May 2020, Lendingkart has fired more than 30 percent of its employees. The prominent team members and the management have also taken a reduction in their salary.
Lendingkart had to compromise on their worker base across many offices to ensure long term sustainability. The company says that it was a part of their annual inspection, which intends to make healthy choices for the company. Their reason for the large number of employees fired is the assumed financial changes in the coming year. However, Lendingkart promises extended medical benefits and insurance to fired employees. They are also given a notice period of five months and outplacement services.