The Indian fintech ecosystem just has a new bright star, this time is the AI-powered lending solutions provider Lentra, which managed to secure $60 million in funding at a valuation of $400 million, TechCrunch reports.
Lentra’s Series B funding round was led by Bessemer Venture Partners and Susquehanna – two long-time financiers of the startup – while it also counted on the participation of Citi Ventures – the global bank’s VC arm.
The Indian fintech company specializes in helping financial institutions automate their lending process by using artificial intelligence. They have managed to make their solution appealing by tackling some of the obstacles and bad experiences that banks have had previously when attempting to go digital.
What is Lentra and How Much Money is it Making?
Lentra generates money every time its lending API is used. According to TechCrunch, the firm’s annual consumption rate – a metric that showcases how much money Lentra is bringing from the use of its platform – was $1 million during its first year of operation.
By 2024, the firm is forecasting that it will be generating approximately $100 million in ACR, resulting in a forward 4x valuation to its revenue-generation capacity based on the number of this latest funding round.
Also read: Best Tech Stocks to Buy in November 2022
“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”, D Venkatesh, the founder and CEO of Lentra told TechCrunch during a recent interview.
For banks, the top priority when facilitating the process of obtaining a loan through automation is to ensure that the quality of their loan portfolio does not decline as a result of poorly screened borrowers.
Lentra is tackling this issue by first looking at the problem. The firm has found that most cases of fraud in banking within India result from ID theft. “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”, Venkatesh stated.
The fintech’s AI-powered platform attempts to identify potential fraud causes by using data from multiple sources. One interesting solution proposed by Lentra is vKYC – a customer verification software that uses video to onboard new customers.
This is the first time Citi Ventures is expanding its reach to the fintech real in India and could mark the beginning of a fresh wave of VCs who may be looking at emerging economies at a point when developed ones are showing signs of a slowdown.
Lentra plans to use the capital it just raised to expand its operations to three more countries within the Asian continent: Indonesia, the Philippines, and Vietnam. The firm also has big plans to take its products and services overseas, eyeing the US as a market they would like to step into pretty soon.
The Indian Fintech Startup Ecosystem is Thriving
According to data compiled by Inc42, the Indian startup ecosystem is made up of 647 funded ventures. These companies have managed to attract more than $20 billion in investments from 2014 to the first semester of 2022.
Fintech companies have spearheaded this trend as Inc42 reports that 32% of these funded businesses are from this up-and-coming space. Meanwhile, stats from the Invest India program of the National Investment Promotion & Facilitation Agency indicate that the number is even higher at $30 billion.
Also read: Best Trading Platforms in India Reviewed
Estimates from India Invest report that 150 deals are being made every quarter with fintech startups within the country and that 1 out of 5 of the country’s unicorns come from this segment of the financial industry.
“There is an explosion of fintech innovation and enterprise in India. It has turned India into a leading fintech and startup nation in the world. The future of fintech and industry 4.0 is emerging in India”, commented the country’s prime minister, Narendra Modi, in regard to this trend.
Other Related Articles: