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India initially made its title within the tech world years in the past when it staked out status as a key hub for enterprise course of outsourcing. Now that legacy has taken a really completely different flip in fintech with outsourcing of a really completely different sort, with the emergence of embedded finance know-how. In the newest improvement, Lentra, an Indian embedded AI-based finance startup, has raised $60 million — a Series B that values the startup at “over $400 million,” D Venkatesh, the founder and CEO of the startup, advised Thealike in an interview.
Existing traders Bessemer Venture Partners and Susquehanna International Group (SIG) led the spherical with strategic participation additionally from Citi Ventures, a subsidiary of the New York-based funding banking big Citigroup.
This is Citi Ventures’ first funding in a fintech out of India, and that and this spherical general underscores how far the fintech and embedded finance ecosystem have come alongside lately. Lentra, which is worthwhile, has been rising at a really quick clip. In 2019, its first yr of operations, it registered $1 million from its “annual consumption rate” — this time period pertains to the quantity of income Lentra makes primarily based on utilization of its APIs. As of this yr, that determine is as much as $10 million, and it’s projected to hit $100 million in 2024.
The Mumbai-based startup works with business banks to energy their digital mortgage companies. HDFC Bank, Federal Bank, Standard Chartered and IDFC First Bank are a few of its key prospects. Overall, Lentra has greater than 50 purchasers and has processed over 13 billion transactions and $21 billion price of loans since its launch. Venkatesh stated the startup achieved all this progress with out hiring a single gross sales government till April this yr.
The firm’s mission isn’t not like that of quite a lot of different fintechs which have thrown their hats into the ring to work with — quite than utterly upend and disrupt — legacy monetary companies suppliers, which have discovered themselves unable to maintain up with innovation from quicker transferring, tech primarily based opponents.
“We want to help and empower the banks, who are our clients, to lend better, lend completely on a digital platform and improve on all parameters,” stated Venkatesh.
Those parameters are the identical for banks the world over. Yes, banks need to lend extra, and to be extra accessible to extra potential debtors — therefore transferring to digital platforms to assist them scale and compete higher in opposition to digital-first choices. But banks have had their ft burned many a time already: they don’t need to tackle a load of dangerous debt within the means of scaling, so that they want higher tech to enhance how they vet debtors, and likewise to have a greater grip on forecasting what they may anticipate to get in returns (and losses) in consequence.
The four-year-old fintech helps them do that by means of quite a lot of mortgage instruments. Lentra Lending Cloud, which supplies ready-to-use third-party API connectors to numerous information sources, in addition to a Loan Management System (LMS) and a no-code Business guidelines engine (BREx) with modules for purchasers to make use of out-of-the-box. The startup additionally has a platform referred to as GoNoGo in its catalog that helps banks verify whether or not a mortgage ought to be given to a buyer as soon as they get their software.
Venkatesh stated that in India, 90% of lending frauds happen by the use of ID proof thefts, the place dangerous actors impersonate somebody with a greater credit score document to get a mortgage shortly. Lentra makes use of AI to triangulate information to determine potential fraud makes an attempt.
“If you solve ID theft fraud, you minimize the approach or the stance that the bank will have towards a non-performing asset or bad loan,” the founder stated.
He claimed whereas banks had solely been in a position to whittle down the mortgage course of — making use of, processing and approving or denying purposes — to between six and 7 days, Lentra’s know-how has diminished that turnaround to some seconds.
Even although quite a lot of startups try to ease lending for banks, curiously Lentra sees Salesforce as considered one of its largest opponents in relation to mortgage origination.
“Our number one target is anyone who’s using Salesforce for loan origination. We go, latch on to them, and then we convert them,” Venkatesh stated.
Citi isn’t just desirous about tapping extra into India’s tech ecosystem, however to leverage it for its personal world progress, too.
“Lentra is our first fintech investment in India, and we are very excited about the team’s ability to develop and scale low-friction software solutions for lenders,” stated Everett Leonidas, Director & APAC Lead Investor for Citi Ventures, in a press release. “As a global bank, we look forward to Lentra scaling their products and platform internationally.”
Venkatesh advised Thealike that Lentra plans to make the most of the funding to proceed updating its platform, add new options and make it extra sturdy and quicker. The startup can be set to develop past India and set up its enterprise outdoors the nation, beginning with three economies in Asia: Indonesia, the Philippines and Vietnam. Post the preliminary growth, the startup plans to transcend Asia and enter the U.S.
Offices within the three new Asian nations will grow to be operational beginning as early as January, the founder stated.
Lentra already has its presence in Singapore because it acquired an AI startup TheDataTeam in June this yr that had an workplace within the Lion City. Venkatesh stated that the workplace in Singapore would grow to be the automobile for the startup to enter the ASEAN economies.
Alongside bettering the providing and increasing the enterprise, Lentra has plans to amass complementary companies. The founder advised Thealike that its acquisition plans give attention to three areas — robotic course of automation, fee programs or options that aren’t regulated entities and groups engaged on statistical modeling or constructing heuristics mannequin inside statistics.
“Lentra is empowering lenders to fuel the dreams of millions with effective financial inclusion and credit decisioning,” stated Vishal Gupta, Partner at Bessemer Venture Partners. “We were really impressed with the combination of their technology prowess and the commercial advantage that Lentra is delivering to their clients. We look forward to helping them continue to achieve their vision of becoming the most trusted and sought after cloud-native digital lending platform, empowering clients in democratizing credit through accurate decisioning and rapid processing.”
Lentra additionally has HDFC Bank as an investor, although it didn’t take part within the newest funding spherical. Venkatesh stated that the financial institution might have invested nevertheless it didn’t this time because it needed to observe the Reserve Bank of India’s situation of not holding greater than 10% in unrelated companies resulting from merging with HDFC Group.
The startup at the moment has Mumbai as its primary market, adopted by Delhi, Chennai and Bengaluru. It has a staff of 500 folks that’s aimed to develop to 800 to help the continuing plans.
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