Bengaluru-based full stack consumer lending firm Credy has raised an undisclosed amount of funding in pre-series A mixed equity and debt round. Ahmedabad-based NBFC MAS Finance has provided the debt capital while some of the existing investors invested through equity funding round.
The Y Combinator-backed startup plans to use the freshly raised capital to continue building Credy’s loan book and strengthen its distribution network across India through more partnerships. Founded by Harshit Vaishnav, Pratish Gandhi and Abhash Anand in 2017, the startup has raised a total of ₹10.5 crores since its inception.
The startup is backed by Y Combinator, Khosla Ventures, Vy Capital and other angel investors. Credy was a part of Y Combinator’s 2017 Winter batch.
Kamlesh Gandhi, founder of MAS Finance said, “We are impressed by Credy’s understanding of keeping fundamentals of credit delivery and risk management intact. Their intent of using technology extensively will be a very strong enabler to build their distribution in a cost optimised way with a hybrid mix of online and offline process.”
Credy enables online disbursal of short term personal loans for a medical emergency, vehicle purchase, education fee payment and marriage expenses. The company has 30 employees and has developed a partnership with Fullerton India, MAS Finance and two other Non-Banking Financial Companies.
Credy also started a financial product for school fees financing that lets customers convert huge amount of school, college and coaching fees into EMIs. The startup is currently functional in Bengaluru, Hyderabad, Nagpur, Pune, Chennai and Mumbai. Credy also provides 0% EMI plans where a customer doesn’t have to pay any interest.
The startup grew over 11 times since 2018 and is profitable with a positive asset-liability profile. The startup aims to grow at 15-20 per cent MoM in FY 19-20 and launch services in more cities like Ahmedabad and Coimbatore. The company said 66% of its loans have crossed 50% of their repayment cycle.
India’s digital lending market has the potential to become a ₹71 lakh crores ($1 trillion) gold mine in the next five years, according to a BCG report. And personal lending is estimated to grow to a ₹3.5 lakh crores ($50 billion) market at a CAGR of 30 per cent. A 2017 EY report — The Battle For The Indian Consumer of 2017 said that India’s adoption index for lending is 20% as compared to global 10%.