Mumbai-based Alteria Capital has written a Rs 80 crore cheque for digital lending firm Lendingkart, the single largest transaction by the venture debt firm till date.
The transaction, which is also possibly the largest deal by a venture debt firm for a home-grown startup, will see Lendingkart, which also counts the likes of Temasek-backed Fullerton Financial Holdings, Sistema Asia Fund and India Quotient as its backers, use the proceeds to further grow its business among the micro, small and medium enterprises, which it caters to.
“MSMEs have traditionally faced huge hurdles in growing their businesses. Our goal at Lendingkart is to help them succeed by fulfilling their financial needs,” Harshvardhan Lunia, chief executive of Lendingkart, said in a statement.
The development comes at a time when risk capital investors are turning increasingly cautious about backing digital lending startups, following the twin blow from a liquidity crisis at Infrastructure Leasing and Financial Services (IL&FS) and after Dewan Housing Finance Ltd (DHFL) missed repayments to its bond holders.
The total quantum of equity funding in the fintech lending sector stood at nearly $394 million in 2018-19, an about 5% drop from $413 million in the previous year, according to data sourced from business intelligence platform Tracxn.
Further, the number of companies that raised funds stood at 60 against 73 in the previous year. The number of equity funding rounds dropped to 76 in 2018-19 from 91 in the year before, as per Tracxn.
“The last few quarters have witnessed a lot of volatility in the NBFC space but the companies which have robust underwriting platforms and a strong equity cushion have been able to turn this into an opportunity for growth,” Vinod Murali, managing partner at Alteria Capital, said.
The venture debt deal comes about 16 months after Lendingkart Technologies, the technology and digital marketing arm of Ahmedabad- and Bengaluru-based fintech startup Lendingkart, raised Rs 565 crore in a Series C round of funding.
“While liquidity has not been easily available for the broader market, Lendingkart has grown sharply during this phase. The team at Lendingkart has built a solid foundation and we are excited to partner with them at this juncture,” Murali said.
The Lendingkart transaction is the second one announced by Alteria this month. It had also led a Rs 25 crore venture debt round in dockless scooter sharing platform Vogo.
The Mumbai-based firm founded by Murali and Ajay Hattangdi, who previously led Temasek-backed InnoVen Capital’s India operations, has emerged as one of the country’s largest providers of venture debt to the country’s startup ecosystem.
Alteria manages a Rs 800 crore corpus, with a greenshoe option of Rs 200 crore. It provides venture debt in the range of Rs 5 crore to Rs 100 crore to primarily venture-backed companies, and counts the likes of Faasos, Dunzo, RAW Pressery and Toppr in its portfolio.
Last year, Lendingkart Finance, the sister firm of Lendingkart Technologies, had raised ?300 crore in non-convertible debentures. Aditya Birla Sun Life AMC has infused Rs 150 crore while the remaining came from another mutual funds entity, whose name was not disclosed.