Online gold loan startup gets $35 million from Binny Bansal, GGV

BENGALURU:

Rupeek

, a five-year-old startup which helps consumers get loans against gold, has raised another $35 million in funding from Flipkart co-founder Binny Bansal, US and China-based venture capital firm GGV Capital, Korea’s KB Investments and Flipkart CEO Kalyan Krishnamurthy-backed Tanglin Venture Partners. The investment will take the valuation of Rupeek, which operates through with a branchless model of home pick up and dropping off the gold, to over $300 million.


The new round will take the total capital raised by Rupeek to about $70-75 million, with early backers including

Sequoia Capital India

and Accel India. The startup is expected to disburse loans of about $28 million in February and plans to further accelerate the loan book going into the year.

The startup will use the capital to expand from 10 cities to 30 cities, brand building, setting up data science team and invest in its hardware product which assesses the quality of gold.

The startup was set up in 2015 by Sumit Maniyar, an IIT-Bombay chemical engineer who had earlier co-founded education tech startup Function Space besides working at companies like JP Morgan and Religare.

“Gold loans serve as the overdraft or the credit card for self-employed borrower or even salaried class who can’t either get the quantum of loans or have the right credit score,” said Maniyar.

The startup works with banks and NBFCs which are not active or don’t have the capabilities in the gold loan segment, leveraging their balance sheet to lend. This gives these financial institutes ability to expand into a market without opening own branches and network, while also allowing Rupeek to lend at a rate which “25-40% lower as compared to NBFCs,” according to Maniyar.

Rupeek also has its own NBFC, which it primarily uses to try new products or launch in new markets, while about 95% of the loan book is through its partners.

India’s gold loan market is expected to reach Rs 4,61,700 crore by 2022, growing at a compounded rate of 13.4%, according to a recent report by KPMG. The sector has seen several non-banking finance companies like Muthoot and

Manappuram Finance

which have built a loan book of billions of dollars.

"I am really excited about how Rupeek is opening up access to formal credit for a large base of users. Their strong customer proposition and approach of partnering with banks is truly a game-changer for the unorganized gold loans space in India," said Bansal, who is also setting up a $300-400 million venture capital fund to invest in startups. Bansal's other fintech investments include general insurance player Acko.

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