Digital lender Loanzen raises pre-Series A funding

Loanzen, a digital lending startup that offers loans to small companies in the logistics sector, has raised pre-Series A funding from venture capital firm Kae Capital Management.

The startup will use the funds to expand its team in Bengaluru and grow its loan book, it said in a statement. It didn't disclose the amount it raised.

Kae Capital usually first invests in a company during the pre-Series A round. It also invests during the Series A and Series B rounds. Overall, it puts in up to $3 million (about Rs 20 crore) in a company across various stages, according to its website.

“What we saw in Loanzen was an opportunity to build a large business in underserved small and medium enterprise credit markets with a blend of technology and operational efficiencies,” said Shubhankar Bhattacharya, venture partner at Kae Capital.

Co-founder Madhu Sudhan said the company’s core product that has seen rapid growth is financing small businesses in the logistics sector. He said the road freight segment is undergoing rapid changes because of initiatives such as the Goods and Services Tax and the government’s road infrastructure push.

The startup was founded in September 2015 by IIM-Bangalore alumni Madhu Sudhan and Venkatesh Sankararaman and Ritesh Kadmawala, a computer science graduate from the University of Southern California. It was initially a peer-to-peer lending marketplace but later pivoted into its current form.

Like a number of other digital lending startups, the startup operates through a technology company, which manages the online platform, and a non-banking finance company, which gives out the loans. Loanzen Technologies Pvt. Ltd is the parent company while Loanzen Finance Pvt. Ltd is the NBFC.

In February 2016, Loanzen raised seed funding through angel network Tracxn Syndicate. It hadn’t disclosed the amount it raised at the time. According to VCCEdge, the data research platform of VCCircle, the startup received about Rs 5 crore in a seed round in February 2017 from Kae Capital and its affiliates.

Loanzen is among a growing number of digital lending startups to receive funding. Recently, Bengaluru-based Namaste Credit, an online lending platform for small and medium enterprises, raised $3.8 million in a Series A round from Nexus Venture Partners.

Kae Capital

Founded in 2010, Kae Capital invests in early-stage companies. The sector-agnostic investment firm has 37 companies in its portfolio, its website shows. It previously invested and exited in about a dozen companies including InMobi, Myntra, ZipDial and Fractal Analytics.

Its recent bets include investments in Mumbai-based fantasy sports platform HalaPlay in November 2017 and Bengaluru-based gaming startup Hypernova Interactive in July.

In September, Kae Capital invested in online consumer lending platform CrediFiable. The previous month, it made a $1.3 million investment in Bengaluru-based health-tech startup Touchkin.