Chennai-based OptaCredit, an alternative-lending fintech startup focused on untouched Salaried Employees, is in early talks with Funds to raise around 8-10 Mil USD to fund expansion and growth plans. OptaCredit, which has more than 40 employees, had as part of its Pre-Series A, raised an undisclosed amount earlier, led by the Family Office of one of the founders of a pioneering payment technology company. Impact funds and Asian funds are said to be showing very keen interest in the model, confirmed a source privy to the development.
Unlike many fintech players including lead-generators and marketplaces, OptaCredit operates as a data-driven end-to-end lending stack powered by artificial intelligence, with control right from sourcing to disbursements to collections. The Chennai-based fintech startup, which currently operates in a number of Tier-1 Cities, has a hybrid approach, where it contributes a certain % of loan assets generated via its platform, on its balance sheet as it has a lending license.
In one of the largest credit lines secured by a Fintech Startup in India, OptaCredit has secured additional credit lines of Rs. 200 Crores (~ 30 Mil USD) from DMI Finance. This is on top of the initial 25 Crore line, which was reported in early 2018. DMI is an India-focused financial services platform with businesses in corporate lending, housing finance, consumer finance and asset management. OptaCredit is also in discussions with multiple other institutions for additional credit lines.
Chennai-based Investment Bank Advay Capital Advisors has been appointed to run the mandate.
Using its proprietary scoring techniques, OptaCredit focuses on exploring unique, alternative mechanisms to create new ways for a more defined customer assessment to determine “credit-worthiness” of “Thin-File” applicants, mainly to salaried employees belonging to unlisted/uncategorised employers being denied credit or provided sub-optimal credit. There has been a constant and growing need for credit solutions in the “Missing middle” in this segment, which not many lenders cater to.
Assimilating various forms of non-traditional and traditional data, every eligible applicant is assigned an OptaScore (OptaCredit’s proprietary score), to make convenient, quicker, and cost-effective loans available to the previously underserved. By deploying machine learning algorithms on these varied data-sets which help analyse and capture complex patterns in repayment data, OptaCredit is able to make better credit decisions, which results directly in lower portfolio delinquency rates without negatively affecting approval rates. This has allowed the startup to provide straightforward and transparent financing to a broader set of consumers.
Recently, we reported that Reserve Bank of India (RBI) is working on setting up a regulatory sandbox for fintech companies especially digital lending startups. With Sandbox, companies can test out their product before releasing it to public usage. This will also involve bypassing RBI regulations, though for testing purpose only.
To recall, in this month China’s ShunWei Capital has led the $5 million series A financing round of Mumbai headquartered micro-lending platform Upwards Fintech Pvt. Ltd.
Prior to this, Bangalore-based peer to peer (P2P) lending platform Finzy raised $2.3 million in Pre-Series A round, from senior professionals from BFSI industry. In the same month, Bangalore-based digital consumer lending startup HappyEMI raised $1 million from AJ Ventures, JAN and Anand Sankeshwar, Managing Director of VRL Logistics.
[Top Featured Image – Optacredit Team | ~ Via YorStory.com]