Digital lender to strengthen SME lending and expand tech infrastructure
Fresh Capital Injection to Power Growth
Pune-based digital lending platform LoanTap has raised $6.2 million in a fresh equity round led by July Ventures. The funding round also saw participation from existing investors, including 3one4 Capital, Avaana Capital, Kae Capital, and the Swapurna Family Office. In addition to equity, LoanTap secured $2.3 million in venture debt, bringing its total capital raised to approximately $26 million to date, as per company filings.
Transition from Consumer to SME Lending
Founded in 2016 by Satyam Kumar and the late Vikas Kumar, LoanTap began as a consumer-focused digital lender. Over the years, the company strategically pivoted to focus on serving small merchants and micro-businesses, such as local pharmacies, general stores, and stationery outlets.
The company has significantly scaled down its unsecured consumer loan portfolio. Instead of lending from its own balance sheet, LoanTap now sources loans for its NBFC (Non-Banking Financial Company) partners, helping expand access to credit while managing risk.
Lending Footprint and Customer Reach
LoanTap claims an annual loan disbursal run rate of ₹600 crore, with operations spread across 26 Indian cities. The platform has catered to nearly 50,000 retail customers, mainly aimed at businesses earning below ₹20 lakh a year. These businesses usually tap into credit lines to purchase inventory from distributors which helps their working capital conversion cycle.
The company has aggressive plans to grow its lending to ₹900 crore by FY26, underscoring its optimism on India’s fast-growing MSME segment.
Tech-Driven Lending Infrastructure
LoanTap has also invested heavily in building its middleware technology platform, which allows banks and NBFCs to originate and manage loans to micro and small businesses seamlessly. As of now, three financial institutions are using this proprietary software to digitize their credit delivery operations.
This digital-first approach is seen as a key differentiator in India’s competitive fintech lending market, where compliance, customer convenience, and speed are crucial.
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Strategic Acquisition in Healthcare Lending
In March 2023, LoanTap acquired Unofin, a healthcare-focused fintech startup, enabling LoanTap to deeper invest in healthcare finance with a range of tailored credit solutions that includes the financing of medical treatments and hospitals.
The integration of Unofin has allowed LoanTap to expand the suite of products it offers and serve a fairly unserved but growing market. Healthcare lending overall remains a niche but fast growing opportunity, as medical costs continue to rise and demand for affordable credit increases.
Financial Performance and Operational Update
For the financial year ending March 2024 (FY24), LoanTap reported a revenue of ₹67.5 crore and a net loss of ₹12.7 crore, according to company disclosures. While the company remains in the red, its investments in tech and customer acquisition are expected to yield results over the coming fiscal years.
In the same fiscal year, LoanTap had raised ₹24 crore (approximately $2.9 million) in debt from Lighthouse Canton, a Singapore-headquartered investment institution, further boosting its lending capacity.
Leadership Changes After CTO’s Passing
LoanTap experienced a significant loss with the passing of co-founder and Chief Technology Officer, Vikas Kumar in April 2024. In turn, LoanTap is poised to pull a senior executive to the role of co-founder and promote an internal team member to Chief Technology Officer (CTO). This internal transition is expected to help preserve the company vision while continuing to operate as normal.
Looking Ahead: Focus on Underserved Segments
With newly acquired funding, LoanTap intends to upgrade their tech infrastructure, grow the merchant lending, and further expand its reach across Tier II and Tier III cities. Credit underwriting Tech, partnerships with the NBFCs, and niche lending sectors like healthcare places LoanTap in a good spot in the ever-evolving Indian fintech space.
India’s small business ecosystem remains largely underserved by traditional banks, and platforms like LoanTap aim to fill this gap with customized, digital-first credit solutions.
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