App based consumer lending startup SmartCoin has raised over $7 million in Series A funding from LGT LightstoneAspada and existing investors Unicorn India Ventures and Accion Venture Lab.

SmartCoin lends to a large underserved market hitherto not served by banks, NBFCs, or microfinance institutions. The company’s product offering includes small ticket personal loans to micro merchants, self-employed and salaried individuals, who mainly borrow to fund their economic advancement. Use cases include working capital for micro-merchants, fuel and vehicle repair funding for delivery executives; vocational training for micro-entrepreneurs and emergency medical needs of blue/grey collar workers.

Rohit Garg, Co-founder CEO, SmartCoin, said, “Our goal has been to provide access to credit to those underserved by the formal banking system. Our proprietary AI/ML powered risk-assessment engine enables loan-approval within minutes and provides credit through a hassle-free, completely automated process. Deeper insights into the customer’s financial and behavioral data, combined with a gamified ladder, enables unlocking better products over time. Our choice to build for the credit-starved mass market and strong portfolio performance has helped SmartCoin stand out in a crowded fin-tech market. We are delighted to have LGT LightstoneAspada come on-board alongside our other investors given their experience in financial services and focus on impact.”

SmartCoin began operations in 2017 and has since then, scaled rapidly serving customers across all the states and over 95% districts of India. The company has offered loans amounting to over 400 crores to half a million customers, with a pan-India user base of over five million. They have also received an NBFC license in October 2019.

With a differentiated and scalable business model built on a suite of AI/ML engines that are trained over terabytes of data, SmartCoin has been recognized internationally among the Top-50 startups driving financial inclusion around the globe by the likes of Visa, IFC and Metlife. The company was also the only fintech startup in 2019 to successfully graduate from both Google’s Launchpad Accelerator program and its App Excellence program for its advanced data- driven, mobile- first approach.

Kartik Srivatsa, Managing Partner, LGT LightstoneAspada, commented, “We are excited to back, in SmartCoin, one of the strongest teams in machine learning and AI in financial services. The company has already built the foundations of what could be one of the important fintech platforms in India that delivers personalized financing products at an affordable cost to underserved households towards their goal to building positive financial net worth. SmartCoin’s business model has the ability to provide data-driven insights in a customer segment that is otherwise opaque and can unlock means of formal credit and financial services. We believe that their AI/ML engine can over a period of time also deliver personalized digital services in areas such as education and healthcare for this segment.”

SmartCoin plans to use the current round of funding to primarily grow their loan book. SmartCoin also plans to expand its data science team, advancing their AI/ML-based underwriting platform, launching new products and growing its user base to 10M.

Bhaskar Majumdar, Managing Partner, Unicorn India Ventures, says, “We identified Smartcoin quite early in their journey and decided to invest in the company. We were quite impressed with the market segment that Smartcoin wanted to address as most other fintechs at the time were chasing white collars that still have credit history in terms of digital spending. But Rohit and his team decided to penetrate perhaps the most difficult customer segment. Their thesis that people are willing to payback if given hassle free loans and their ability to keep their NPAs lowest in their industry has prompted us to continue to invest in the Company.”

Vikas Raj, Managing Director, Accion Venture Lab, added, “SmartCoin’s data-driven and responsible approach to digital lending enables them to effectively reach underserved populations that lack access to credit. We’ve had great confidence in their team and strategy since making our initial investment and look forward to continuing our partnership.”

Unitus Capital acted as an exclusive financial advisor to the transaction.

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