The funds raised from the latest round will go into expanding the business geographically and increase hiring.

SME Lending Startup ZipLoan raises 3 mn in Series A round led by Matrix Partners Image for representation
Atom Fund Raising Wednesday, October 25, 2017 - 22:48
Written by  S. Mahadevan

ZipLoan has raised $3million in series A funding led by Matrix Partners. ZipLoan’s existing investors, WaterBridge Ventures, Whiteboard Capital and former Capital18 MD, Sarbvir Singh have also participated in this funding exercise as follow-on funding.

ZipLoan is based out of Delhi and specializes in lending to the so termed “undeserved” by the normal banking institutions, primarily the small and medium sized businesses, SMEs. Besides Delhi the company has its operations in Indore.

ZipLoan has employed advanced technologies to operationalize its loan appraisal and management processes. So, its proprietary risk assessment engine will analyze the inputs received from applicants and then give them relative points called ZipScore. This makes the decision-making process on loan approvals much easier and ZipLoan claims it has brought down the time required to consider and approve the loans and disbursal of the amount to just 4 days.

ZipLoan offers loans of up to Rs. 5 lakh and by and large it is security-free. The company has also developed a program Loan Lifecycle Management to help its executives manage their borrower-customers effectively. These technologies have also ensured that they boast one of the lowest in term of the operating costs in the industry.

ZipLoan has also tied-up with IDFC Bank and a couple of other NBFCs in order to help first-time borrowers and other businesses in the system who need financial assistance.

The funds raised from the latest round will go into expanding the business geographically, recruit more hands, increasing the headcount from the existing 45 to around 80 and also into upgrading the technology.

The MSME sector is receiving increasing attention from the lending point of view. Firstly, there are some 40 million SMEs in India and though there are challenges involved in dealing with this segment in terms of accessibility and other factors, the deployment of technology, like what ZipLoan has done, can definitely make it a win-win situation for all stakeholders. The government is also giving a lot of thrust to this sector to boost the economy and employment.

Having started in 2015, the fintech startup has already crossed the $1.5 million (Rs. 10 crore) mark in terms of overall disbursements. This covers around 350 borrowers with an average ticket size of around Rs. 3 lakh.