Lendingkart raises Rs 200 crore in debt financing, to clock disbursals of Rs 6,000 crore in FY24

Harshvardhan Lunia, cofounder of Lendingkart

Lendingkart, the micro, small and medium enterprises (MSMEs)-focused digital lending platform has raised Rs 200 crore in a debt financing round from Temasek backed-EvolutionX Debt Capital in order to finance the firm's working capital requirements.

This comes at a time when startups are increasingly opting to raise debt capital amid a valuation mismatch and delay in equity funding in India.

“This is a bridge-to-equity round. We are in fact raising another round by the end of this year, talks are on. Until then we will use this debt for financing our working capital,” said Harshvardhan Lunia, cofounder of Ledinkart in an interaction with Moneycontrol.

The firm is looking to raise another Rs 600 crore in equity to expand and grow its business, Lunia said.

“This will mainly be for working capital requirements. And we also made a couple of investments at Lendingkart and this money will be used to feed those acquisitions, and overall we will also look at scaling up our technology business,” Lunia added.

Founded in 2014 by ex-banker Lunia and ex-ISRO scientist Mukul Sachan, Lendingkart has two arms - Lendingkart Finance Limited (non-deposit taking NBFC) and Lendingkart Technologies Pvt. Ltd.

The firm has so far disbursed around Rs 4,000 crore of loans as of FY23 and is looking to clock around Rs 6,000 crore of disbursals by the end of the current financial year and around Rs 10,000 crore in the next two years. The company is also planning to clock a profit before tax of Rs 200 crore in FY24.

“Unit economics-wise, we always maintained a healthy rate. We are a profitable business clocking about Rs 120 crore of profit and around Rs 4,000 crore in disbursals in FY23…The disbursals as well in the next financial year will be around Rs 6,000 crore,” Lunia said.

The company disburses loans with an average ticket size of Rs 5 lakh to Rs 6 lakh to the MSME business owners.

In a move to expand its products, Lendingkart is planning to launch credit on UPI in the next two-three months.
In April this year, the Reserve Bank of India permitted banks to transfer pre-sanctioned credit lines through the UPI network.

“The next big project we are working on is bringing credit on UPI for MSMEs…we are presently in talks with banks and NPCI and will soon launch the same along with other products like credit cards,” Lunia said.

Lendingkart has so far raised around Rs 1,050 crore in equity from investors like Fullerton Financial Holding (FFH) (100 percent subsidiary of Singapore Sovereign Fund Temasek Holdings), Bertelsmann, Mayfield India, Saama Capital, Sistema Asia and India Quotient.

“We believe Lendingkart will continue to lead the market and fill the funding gap for the MSMEs with its pioneering, end-to-end tech stack in customer acquisition, credit underwriting and collection, as well as its leading product innovation and customization capabilities,” said Rahul Shah, Partner of EvolutionX Debt Capital.