SME loan platform Happy raises funding from DMI Finance, others

Happy, an online lender to small and medium enterprises (SMEs), said it has secured $20 million (Rs 140 crore at current exchange rate) in a fresh investment round from investors in India and the United States (US) to grow its artificial intelligence (AI)-powered business model.

The startup said in a statement it has raised $3 million in equity funding from a few undisclosed individuals based in India and the US, and the remaning $17 million in debt funding from institutions including DMI Finance, which is an Indian non-banking financial company (NBFC).

Happy, owned by ArthImpact Finserve Pvt. Ltd, plans to enhance its backend processes to better evaluate new borrowers with the capital raised. It also aims to disburse over one million loans over the next financial year, besides reducing the loan fulfilment period to under one minute.

“What inspires me is that there are millions of people who need financial assistance for basic economic mobility and growth. Micro-enterprises account for 37.5% of India’s economy and employ 20% of India’s workforce, that is, over 100 million people. Small flexible loans help create greater business opportunities, stabilise cash flows, and enhance livelihoods for small business owners and their employees,” said Manish Khera, co-founder and managing director, Happy.

Happy was co-founded in 2016 by Khera, former managing director and chief executive of Airtel Payments Bank; Shweta Apramey, an investor and a former executive at Airtel Payments Bank; and Gautam Ivatury, an entrepreneur.

Mumbai-based Happy provides loans to small and medium businesses.

In its first two years of operations, the company claims to have disbursed over $20 million through over 32,000 loans to more than 80 kinds of businesses. Currently, it has access to 2.5 million micro enterprises across 20 business partners.

The startup, which mostly caters to the funding requirements of micro enterprises, claims to give instant loan approvals within 24 hours.

Recent deals in this sector

• April 2019: Online loan platform InCred Financial Services Ltd raised Rs 600 crore ($86 million at current exchange rate) -- significantly big for a Series A round -- in a funding transaction led by Dutch development bank FMO.
• April 2019: Digital lending startup ZestMoney raised $20 million (Rs 139.4 crore at current exchange rate) to address the growing demand for equated monthly instalment (EMI) financing in India.
• April 2019: Mumbai-based LoanTap Financial Technologies Pvt. Ltd, a digital platform that offers loans and overdraft products to salaried professionals, raised $8 million (Rs 57 crore at current exchange rate) in a fresh funding round led by new investor 3one4 Capital.