Fintech start-up Kaleidofin raises ₹18 cr in seed round led by Omidyar Network

Chennai-based financial technology start-up Kaleidofin, which provides tailored financial solutions to those in the informal sector, has raised about Rs 18 crore ($2.8 million) in a seed round led by Omidyar Network. Early-stage venture capital firm Blume Venture and individual investors, including Shlomo Ben-Haim, an Israeli serial entrepreneur and investor, also participated in this round. This is Ben-Haim's first investment in India, according to a press release.

Kaleidofin will use the money to grow its customer base pan-India, tie up with more banks and financial institutions and to invest in technology and analytics.

Founded by Sucharita Mukherjee and Puneet Gupta, former IFMR Holdings CEO and CFO respectively, Kaleidofin went live in February. It has about 1,300 customers mainly in Chennai, Gujarat and Bihar, according to Sucharita Mukherjee, Executive Director, Kaleidofin. Over the next three years, it plans to have a million customers, she told BusinessLine .

Kaleidofin partners with financial service providers in credit, savings, insurance and investments and uses algorithms that match the appropriate solution to a particular customer's goal and need. It has tied up with leading non-banking finance companies, microfinance institutions, financial institutions and insurance companies, including SEWA Bank, Sonata Microfinance, ICICI Pru MF, UTI, Aditya Birla, SBI, ICICI Pru Life and Bharti Axa.

According to Mukherjee, there are nearly 600 million informal sector customers, which Kaleidofin hopes to tap, offering its services through a mobile app. The Kaleidofin platform ensures that each customer's goals are met through tailor-made products and services. One of the main problems for informal sector customers is that financial products are not designed to meet their specific and special needs. They have a volatile life and their financial needs are flexible. “Our app provides a bundle of financial products and tells the customers what is best for them,” says Mukherjee.

Kaleidofin acquires customers through its network, of microfinance institutions, cooperative banks and factories. It charges the customers a fee, which can be paid monthly, for the service it provides and gets revenue from the financial institutions.

Smita Aggarwal, Director – Investments, Omidyar Network, said the impact investment venture capital firm had invested $50-60 million in 10-12 ventures in the financial services and fintech spaces in India and $300-325 million in 40-50 fintech ventures globally. While the issue of access to finance had been addressed through many of Government’s policies and programmes, the problem relating to adaptability of the products from a usage standpoint was yet to be addressed. Kaleidofin, with its unique tailor-made solution, fitted Omidyar's investment profile from that angle. Kaleidofin, she said, had adopted a “tech and touch” model for its business – adopting deep technology and algorithms for its business and working with institutions such as SEWA Bank, which made the whole business model appealing, she added.

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