Sachin Bansal leads investment of $14 million in fintech startup U Gro Capital

Poonawala Finance, the other investing entity has entered into a separate securitisation deal with the startup, it is learnt.
Sachin Bansal leads investment of $14 million in fintech startup U Gro Capital
Sachin Bansal leads investment of $14 million in fintech startup U Gro Capital
Written by:

Flipkart co-founder, Sachin Bansal is leading an investment of $14.11 million (₹100 crore) in fintech startup U Gro Capital. The Poonawala family is the other key investor in this round. Sachin Bansal’s investment is in the form of a non-convertible debenture deal. Poonawala Finance, the other investing entity has entered into a separate securitisation deal with the startup, it is learnt.

On the face of it, this small investment is being seen as a help offered to the promoters to raise more funds from other sources, beating the current sentiment, where fintech startups are unable to raise capital.

U Gro Capital has a business model where they lend to MSMEs, a model being adopted by a number of startups. The company claims to have disbursed loans to around 1,000 customers, amounting to ₹600 crore. The projected figure for the current financial year 2019-20 is ₹1,200 crore based on the performance in the first quarter.

The sectors U Gro Capital has chosen for extending loans are healthcare, education, chemicals, food processing / FMCG, hospitality, electrical equipment and components, auto components and light engineering. The funds now raised from Sachin Bansal and the Poonawala family will be deployed in expanding the reach so that they are able to service more clients going forward.

This investment in U Gro by Sachin Bansal again highlights his inclination towards the fintech sector in preference to the other business verticals ever since he walked out of Flipkart. He has an agreement with Walmart on his holding which will keep paying him till 2020 in various tranches.

Bansal is reported to be even dabbling with the idea of setting up a bank and has had discussions with RBI officials on this. He has already acquired an NBFC, Chaitanya Rural Intermediation Development Services Private Limited (CRIDS). He would function as its CEO as well.

Related Stories

No stories found.
The News Minute
www.thenewsminute.com