CreditMantri, which helps those seeking loans connect with lenders through its online platform, has raised ₹51.4 crore ($7.6 million) in a Series B round led by Accion Frontier Inclusion Fund, managed by Quona Capital, along with Newid Capital. Existing investors Elevar Equity, IDG Ventures and Accion Venture Lab participated in the round.

It will use the money to grow its user base, strengthen its product and build the team.

In a recent interview, Ranjit Punja, CEO and co-founder, CreditMantri, had said the company was looking to raise funds to give it the platform to expand the business. He had said the team strength was likely to go up to 130 from 75, in about 18 months of getting the funding.

CreditMantri will also use the fresh funds to improve its capability to analyse data and jump its customer base to around 6 million by October 2018, from around 1.4 million customers now.

In June 2015, CreditMantri had raised about ₹15 crore ($2.5 million) in Series A funding from IDG Ventures India, Elevar Equity and Accion Venture Labs.

The Accion Frontiner Inclusion Fund is a global fintech fund for the under-served, investing in innovative financial technology, and services companies that promote financial inclusion. Quona Capital is an early growth-stage venture firm focussed on financial technology for under-served consumers and businesses in emerging markets. Newid Capital is a direct investment fund focussed on financial services and financial technology companies in developing markets.

CreditMantri uses a combination of traditional data, — such as credit reports — and alternative data — such as social media and data from mobilephones — to create a credit profile for customers. This profile helps customers understand their credit potential and enables them to make informed credit decisions.

Punja had said that CreditMantri had three segments of customers — the credit-healthy, the credit-challenged and the new-to-credit. It adopts a lender pay model. Its customers don’t pay anything for getting their credit score analysed and to be informed of their credit health. If credit-challenged customers want assistance to improve their score, they are charged ₹750; this amount used to be ₹9,000. The venture charges lenders depending on what the service is. It can vary from 0.3 per cent on a housing loan, where CreditMantri has evaluated the customer, to 1.5 per cent on a personal loan.

Outsourced work

There is another revenue stream. Now, banks and other lenders refer a lot of customers who come to them, for evaluation to CreditMantri. In these cases, the company gets a payment irrespective of whether the customer gets the loan or not. This is small in value, but the company hopes the volume on that will be high.

CreditMantri also expects banks to outsource data verification to it, as banks and financial institutions are constantly looking at ways to reduce cost in loan acquisition. The cost is in collecting the data and verifying it.

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