Jan 12, 2017

    Small and medium enterprise-focused online lending platform Loan Frame Technologies has raised a seed round of $2.25 million (about Rs 15 crore), the latest venture-backed transaction in the country’s web-based lending space. The investors in the round include Parag Saxena , co-founder of Vedanta Capital, William Campbell , former chairman of Visa International and Toos Daruvala, co-chief executive of MIO Partners, an internal investment arm of global consultancy McKinsey and Co. Saxena is also the founding general partner of private equity firm New Silk Route. The Singapore-headquartered fin-tech startup provides a marketplace platform to lenders and SMEs, facilitating both secured and unsecured loans for the later, ranging from Rs 5 lakh-Rs 50 crore, according to a senior executive of the company. The Indian subsidiary, which is based in Gurgaon, is called Frame Technology Marketing Services. “We are looking to do about Rs 1,000 crore over the next two years… There is a huge opportunity here The gap is massive, and lending to SMEs has dropped, with the formal banking system seemingly hesitant to do new lending,” said Shailesh Jacob, chief executive, Loan Frame. Founded in 2015 by Jacob, Rishi Arya and Akshun Gulati, Loan Frame currently has about 10 lenders on board, which are a mix of private sector banks and non-banking financial companies. Jacob also said that the startup was in conversation with a public sector bank to onboard the latter on to the platform. “SME lending is at the core of industrial business development. You have to reach out to SMEs and they are often a good risk,” Campbell told ET. The former Visa International chairman was also an early investor in big data analytics company Mu Sigma. This is the second entrepreneurial venture for Jacob. The Gustavus Adolphus College alumni was previously part of research and analytics firm Copal Partners, which was acquired by Moody’s Corp in 2011. Prior to that he had had a stint with technology investment banking Piper Jaffray. According to Jacob, Loan Frame, which launched the beta version of its loans marketplace platform last year, can provide a wide range of products to potential borrowers, including, working meeting, overdraft and cash credits, amongst others. “Digital transactions will go up significantly, as a greater number of people become part of the formal banking system, which will, in turn, expand our reach,” Jacob said. The investment in Loan Frame is the latest transaction by venture capital backing a lending platform in India. In December, data-driven, fin-tech startup Indifi Technologies raised $10 million (Rs 66.5 crore) in a fresh round of funding, which was led by Omidyar Network, while the dsame month also saw IndiaLends mop up a Rs 26.6 crore investment round, led by American Express Ventures, the corporate venture investment arm of American Express Co. A report by Credit Suisse last year said the global online lending spaces a $600 billion opportunity, and is expected to grow 5 times over the next 10 years and potentially touch $3 trillion.