Loantap, a digital lending platform based in Pune, has raised $6.2 million in new funding. The investment round was led by July Ventures, with support from existing investors like 3one4 Capital, Avaana Capital, Kae Capital, and the Swapurna Family Office.
With this new funding, Loantap has now raised a total of about $26 million. As part of the same round, the company also raised an additional $2.3 million through venture debt.
This funding comes at a time when the digital lending industry is going through a tough phase, with stricter rules and banks and finance companies being more careful about lending.
Loantap has shifted its focus from giving loans to individual consumers to helping small businesses, like local pharmacies and stationery shops.
In the last two years, it has greatly reduced its personal loan business. At its highest point in FY23, the company had a loan portfolio of ₹340 crore, but that amount has now been cut in half.
“We have stopped doing balance-sheet-based consumer loans. We are only sourcing consumer loans for our NBFC partners and are primarily focused on small merchant loans,” said Satyam Kumar, co-founder of Loantap. According to Kumar, the company’s consumer loan book, currently managed by partner lenders, stands at approximately Rs 350 crore.
Loantap was started in 2016 by Kumar, a former top executive at IndusInd Bank, and Vikas Kumar, who earlier co-founded SME Networks. Sadly, Vikas Kumar, who was also the company’s Chief Technology Officer, passed away in an accident in Bengaluru on April 30.
Now, the company plans to promote a senior team member to the role of co-founder and choose a new CTO from its current tech team.
Lata now mainly provides credit lines to small shop owners, most of whom make less than ₹20 lakh a year. These credit lines help them pay their distributors. To reach these shop owners, Lata uses short videos and social media. The company is now active in 26 cities.
“We are currently disbursing around Rs 600 crore in loans annually, with about 50,000 active retail customers. Our target is to reach Rs 900 crore in disbursements by FY26,” Kumar added.
Besides giving loans, the company has built its software to help banks and financial institutions work with small retailers. Three partner banks are already using this system.
Loantap ended the financial year 2024 with a revenue of ₹67.5 crore and a net loss of ₹12.7 crore.
Read more- Scytale Buys AudITech for $15M to Boost Compliance Automation
