India P2P lending startup LenDen lands $500k to meet new RBI regs

LenDen Club, a Mumbai-based peer-to-peer lending platform, has landed a $500,000 equity investment from three investors.

The capital came from an undisclosed Indian venture capital fund, and existing investors Venture Catalyst and Anirudh Damani, the managing partner of Artha Venture Fund I. In May last year, Venture Catalyst and Anirudh Damani backed the company with $111.765 in seed financing.

While part of the new funding will go towards strengthening its technology platform, part of the capital will go towards preparing LenDen Club for the new guidelines released by the central bank. All peer-to-peer lending (P2P) platforms will now be regulated by the Reserve Bank of India (RBI). The platforms will now be treated as non-banking financial companies (NBFCs) and will be brought under the ambit of the banking regulator.

Some believe that the new regulation will open up the P2P lending space, especially increasing investors interest in the more established startups. However, one of the major challenges arising from the regulatory is the establishment of a minimum capital requirement, which could potentially restrict startups registering themselves in the space. Part of LenDen Club new funding will help the firm achieve the minimum capital requirement of Rs 2 crore for registration as set by the Reserve Bank of India.

LenDen Club was founded by Dipesh Karki and Bhavin Patel in 2014.?Its platform connects lenders looking for high returns with creditworthy borrowers looking for personal loans up to 24 months. Since founding, the company claims to have arranged and completed loan transactions worth Rs 17 crore on its platform with an average return rate of 25%.

A number of India-based FinTech startups have closed investments in the past month. RenewBuy, a Gurgaon, India-based online insurance aggregator, recently raised $9.2m (INR60m) from Amicus Capital. Last month, Shubham Housing Development Finance Company reportedly received a $35m investment from PremjiInvest, while EarlySalary raised $50m of debt financing from IFMR Capital. EarlySalary is India first FinTech startup offering salary advances and instant cash loans.

Copyright ? 2017 FinTech Global



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