indiagold – a gold-focused digital alternative credit platform – said Friday it has agreed to raise $12 million in a funding round, led by PayU and Alpha Wave Incubation Fund.
PayU, the payments, and fintech business of Prosus, and Alpha Wave Incubation (AWI) fund, which is backed by DisruptAD and managed by Falcon Edge Capital, will lead the investment round with participation from Better Tomorrow Ventures, 3one4 Capital, RainmatterCapital, and existing investor, Leo Capital.
Launched in 2020, indiagold offers gold-backed loans, gold savings, and gold locker services to over a million consumers in India.
The firm will use the fresh funds to expand nationally, and scale the business further.
“India offers a large $650 billion addressable gold loan market which is highly fragmented and currently dominated by the informal segment,” said Nitin Misra and Deepak Abbot, co-founders, indiagold.
“Even the formal segment hasn’t adopted digital practices at scale. indiagold’s suite of financial products bridges this critical need gap by digitally transforming lending against gold. We are proud to have the backing of industry-leading growth investors and take it as a reaffirmation of the inherent strength of our value proposition. With the support of our existing and new investors, we are moving aggressively towards our larger vision of establishing gold holdings as an alternate credit score, and creating a gold back credit platform for lenders to provide instant credit against gold,” they added.
The founders, both former Paytm employees, are drawing from their extensive experience in the fintech space to revolutionise and digitise lending against gold in India.
The company is building an innovative doorstep gold loan business that is powered by a robust technology stack, artificial intelligence-based gold assessment capabilities, and superior customer-centricity to offer faster gold release and a transparent repayment policy.
“Empowering disruptive fintech entrepreneurs through early-stage investments is a key element of PayU’s growth strategy. By supporting businesses that complement our existing portfolio, we aim to achieve our vision of developing a fintech ecosystem that will meet the financial services needs of millions of Indians,” said Vijay Agicha, global head of Strategy & Growth, PayU.
indiagold’s Gold Locker is India’s first locker service that completely reinvents locker services to make them more secure, transparent, and convenient.
The gold financing business in India is predominantly offline, dominated by the informal segment, which accounts for nearly 70 per cent of gold loans in India.
These loans address the liquidity needs of Indians without access to unsecured credit which is availed by less than 10 per cent of the total working population.
The Covid-19 pandemic has accelerated the demand for short-term, low-cost, safe, and easily accessible formal credit options like digital gold loans.
“We are impressed by indiagold’s vision and its proprietary technology to solve critical painpoints plaguing the gold loan industry in India. Gold, found in almost every household in India, is the key to provide affordable credit to every Indian. indiagold’s unique doorstep gold loan and gold locker products not only offer unparalleled customer experience but also enable it to offer credit at more affordable rates. The traction indiagold has seen in a short time is a testament to its superior product capabilities and the deep experience of its pedigreed founders,” said Navroz D Udwadia, co-founder of Falcon Edge Capital.
In response to the Indian consumer’s strong affinity for gold, indiagold offers fast, safe & convenient solutions to monetize household gold to meet specific credit needs, and is emerging as a trustworthy alternative to India’s unorganised gold loan market.