Lendingkart Technologies Private Limited

Summary

Lendingkart TechnologiesPrivate Limited, founded in April 2014, is a prominent fintech startup headquartered in Ahmedabad, India. With aworkforceof of 501to 1000 employees, Lendingkartspecializes providing online financing solutions, focusing onmaking working capital easily
accessible for entrepreneurs

About Company 

Lendingkart Technologies Private Limited is a significant player in the financial technology sector, particularly in working capital finance. Incorporated on December 15, 2014, the company is a private entity registered at the Registrar of Companies in Ahmedabad, Gujarat, India. Its authorized share capital stands at INR 34.6 million (approximately Rs. 34,600,600), with a paid-up capital of INR 25.2 million (approximately Rs. 25,179,307)

Background
Founders

Lendingkart was foundedby Harshvardhan Lunia and MukulSachan inApril 2014

Headquarters

The company's headquarters is located in Ahmedabad, Gujarat, India.

Funding

Lendingkart has received a total funding amount of $ 200.4 million from notable investors such as DarrinCapital Management, Bertelsmann India Investments, and State Bank of India.

Subsidiaries

The company has subsidiaries named Lendingkart Finance Limited, Upwards FintechServicesPrivate Limited, and Finectar TechnologiesPvt. Ltd.

Products and Services

 Unsecured Business Loans

Loans provided to MSMEs the need for security or collateral. Offers flexible loan tenure and minimum documentation.

 Credit Cards.

Lendingkart provides credit cards with cashback options, exciting offers, and various benefits.

Personal Loans

Instant personal loans up to 3 Lakhs, catering to the immediate financial needs of individuals.

Business Model

The business approach of Lendingkart Technologies Private Limited is focused on offering financial services to micro, small, and medium-sized organizations (MSMEs). Their primary business is providing short-term working capital loans to enable small businesses to operate smoothly. Entrepreneurs between the ages of 35 and 45 who need short-term capital loans for their SMEs are the target market for this service. Due in large part to Lendingkart's reliance on internet channels, finance is now more widely available to small and micro companies. Using data and analytics to power the lending process and ensure effective and efficient credit distribution is a crucial component of their approach. Their slogan, "Think cash, think of Lendingkart group," sums up their commitment to offering businesses quick and easy access to capital.

Key Highlights of the Company

Achievements

FY22-23 marks significant achievements in growth, profitability, and innovation, surpassing goals and marking firsts in the financial sector.

Empowering MSMEs

Lendingkart focused on empowering MSMEs through advanced technology and data, providing tailored financial solutions, and fostering business growth.

Digital Asset Construction

The company processed 1.6 million applications, utilizing over 7 billion data points, showcasing its strength in digital lending and MSME insights.

Digital Presence and Reach

Lendingkart'sdigitalplatforms, including a robust website and Android app, contributed to its extensive reach, serving 200,000+ customers across a wide geographical area.

Recognitions

1. The company earned Great Place to Work®Certification and wasawardedtheBest FintechBrandby The Financial Express

Technology Innovations

Emphasizing experience and engagement, Lendingkartleveragedcloud technology for personalized pricing and loan offerings, and introduced AI/ML-based pricing recommendation engines and other digital solutions

Future Vision

Technology Innovations

Lending Kart developed a/ML-based pricing recommendation algorithms and other digital solutions, and it used cloud technology to provide individualized pricing and loan proposals.

Appreciation and Vision for Growth

The Chairman thanked everyone for their ongoing support and offered his vision for growing Lendingkart going forward, emphasizing the transformation of financial services and empowering the MSME sector.

Acquisition and Recognition

Recently, Lendingkart Technologies Pvt. Ltd. purchased retail lender Upwards Fintech to broaden its product offerings and incorporate small business personal loans. The acquisition, estimated to be worth ₹100–120 crore, represents a strategic expansion and diversification for Lendingkart.

Industry Analysis

Customer Reach and Impact During Pandemic

Lendingkart's technology-driven approach serves a diverse range of customers, providing loans to over over17,000 MSMEs and reaching more than 1800 towns, aiding in the recovery of small businesses in the pandemic

Financial Resilience and Performance

A-/Stable Outlook credit rating reflects Lendingkart's strong financial health. The company generated over INR 500 crore in revenue in FY21 and showed strong financial resilience.

Technological Advancements in Lending

Lendingkart has made significant investments in technology, enabling an end-to-end digital experience in MSME lending, covering originations, evaluations, onboarding, and collections.

Positioning as a Key Industry Player

Lendingkart positions itself as a bridge between internet companies with B2B MSME customers and lenders looking to penetrate this segment. It is among the few companies that offer E2E capabilities from customer acquisition to collections through its digital platform
products.

First Ever successful campaign run by the company in FY2022-23

The first integrated campaign by Lendingkart was named "Business LoansBole Toh Sirf Lendingkart," and it was endorsed by well-known Indian actor Rajkummar Rao.

The campaign aimed to introduce Lendingkart's value proposition to as many small businesses in India as possible, highlighting the company's dedication to making loans hassle-free and streamlining MSME financing.

Recent Developments

Financial Turnaround

Lendingkart achieved significant financial turnover in FY22-23, reporting a net profit of Rs 120 crore, a substantial recovery from a net loss in the previous fiscal year.

 Ambitious Growth Goals

The company aims to surpass 6,000 crores in its core business for the fiscal year 2023-24, highlighting its commitment to supporting micro and small businesses.

Debt Financing

In June 2023, Lendingkart secured 200 crore in a debt financing round, boosting its financial stability and supporting operational needs.

Financial Highlights

Inferences from Financials

1. Increase in Total Income: The company's total income increasedfrom₹63,854.37 lakh in2022 to ₹82,407.25 lakh in2023, indicating significant revenue growth
2. .Rise in Expenditure: There was an increase in expenditure from₹40,780.88lakh in2022 to ₹55,667.65 lakh in 2023, suggesting higher operational costsorinvestmentinbusiness activities.
3. Significant Reduction in Impairment of Financial Instruments: The impairment charges dropped drastically from from₹41,471.20 lakh in in2022 to ₹ 11,209.34 lakh in 2023, reflecting better financial asset performance management.
4. Turnaroundto Profitability: The company turned before tax of₹(18,397.71) lakh in in2022 to a profit of₹15,530.26 lakh in in2023, indicating an improvement efficiency andoverallfinancial health.
5. Net Profit After Tax: There was a shift from a netlossof₹(of 14,143.97) lakh in2022 to a net profit of ₹11,565.74lakh in2023, signifying a strong financial recovery.
6. Other Comprehensive Income: Other comprehensive income remained relatively nominal, with a slight decrease from₹24.44lakh in 2022 to ₹5.34lakh in 2023.
7. Total Comprehensive Income: Reflecting the net profit, the total comprehensive income shifted from lossof₹(14,119.53) lakh in 2022 to againof₹11,571.08lakh in 2023.

Overall, these figures suggest that the company experienced robust growth and a successful turnaround in its financial performance between 2022 and 2023.

Competitor Analysis

1. Aye Finance: provides MSMEs with business loans through a special cluster-based methodology.
2. Clix Capital: offers a range of financial products, such as personal loans and financing for the healthcare and education industries.
3. NeoGrowth: provides business loans and merchant cash advances using digital payment data for underwriting.
4. FlexiLoans: provides quick and flexible business loans; it is well-known for its simple application procedure and quick payout.

Other Competitors include

1. Afinoz: A financial services platform providing various loan products, investment options, and financial advisory.
2. Crediwatch: A technology firm that provides real-time insights and business intelligence on Indian businesses, aiding credit assessment and decision-making.
3. Priority Vendor: Specializes in supply chain finance, helping businesses with liquidity management and working capital solutions.
4. ApnaLoanBazaar: An online platform offering a rangeofloanproducts including personal loans, home loans, and car loans.
5. Mountain Dew: This appears to be an outlier and likely not a direct competitor in the financial lending space.
6. Kabbage: An online financial technology company providing funding directly to small businesses and consumers through an automated lending platform

SWOT Analysis

Strengths

1. Technology-Driven Approach: Lendingkart's technology-first strategy has enabled it to serve a diverse range of customers, especially MSMEs, during challenging times like the pandemic, indicating strong adaptability and resilience.
2. Wide Customer Reach: The company has serviced over 17,000 MSMEs across 1800+ towns in India, showcasing its extensive reach and impact on small business recovery.
3. Innovative Platforms and Tools: Lendingkart has developed platforms like ‘2gthr’, ‘xlr8’, and Cred8, enhancing end-to-end lending services and credit intelligence, underscoring its innovation in financial technology.

Weaknesses

1. Dependence on Technology: While technology is a strength, over-reliance on it can be a risk if there are technical failures or cyber threats.
2. Market Concentration: The primary focus on the MSME sector could limit diversification into other potential markets

Opportunities

1. Expanding Digital Financial Services: With its strong technological base, Lendingkart can expand its digital services to cater to abroaderrangeoffinancialproducts beyond MSME lending.
2. Collaborations and partnerships: The company can leverage its vast MSMEdatabase and tech-driven framework for collaborations, enhancing its ecosystemandexpandin

Threats-

1. Competitive Fintech Market: The fintech sector is highly competitive, with many players offering similar services.
2. Regulatory Changes: Financial services are subject to regulatory changes which could impact operations.

Conclusion

With its impressive growth and financial resilience, Lendingkart Technologies Private Limited has established itself as a major player in India's fintech industry. With a strong emphasis on technology-driven solutions and a dedication to helping small businesses, Lendingkart has made significant financial gains and has big expansion plans. To maintain its success and keep empowering the MSME sector, it must navigate a competitive fintech market and remain flexible in the face of regulatory changes.