Monday, October 16, 2017

Micro-Lending Platform KrazyBee Raises US$ 8M in Series A Funding

KrazyBee, the Bangalore-based micro-lending platform primarily focused towards purchase finance, has raised 8M USD in a Series A financing led by Xiaomi Technologies and Shunwei Capital. Others who participated in the investment are E-city Ventures and RK Group. The Series A funding is a mix of equity and debt (majorly equity). The total composite funding received by KrazyBee till date is US$13M that includes a Seed Fund of US$2M and Pre-Series A funding of US$ 3M. The latest round of funding will be used for strengthening the risk model & algorithm, catering to new market segments and focusing on product diversification & geographical expansion in existing segments.

Speaking on the occasion of the Series A fund raise, Madhusudan E., Founder & CEO of KrazyBee, said, “KrazyBee’s mission is to make credit for young professionals and college students in India accessible and affordable. Financial independence among young adults is the need of the hour. A solution which helps them avail personal finance at maximum ease and minimum time is going to win the game in this market.” Earlier this year in June 2017, KrazyBee got an NBFC (Non-Banking Financial Corporation) License from The Reserve Bank of India, which gives it a lot of flexibility to source and manage funds. There are 6 other NBFCs that are lending on the platform currently. “We realized very early that to grow and sustain in this industry, having a steady source and lower cost of funds is quintessential, and this had been our focus right from the very beginning,” mentioned Madhusudan.

“We are actively working towards a risk algorithm that helps us achieve a system-generated decision on every profile, and we are optimizing that further in terms of efficiency & accuracy. Also, being in the Fintech space, compliance is the key and hence, we follow all the regulations very strictly,” added Madhusudan.

Shirley Mao, Investment Director at Xiaomi Technologies, said, “The Indian demography has a large population of urban young adults that spends a lot online & offline. For such an enormous ecosystem, the need for urgent personal finance for purchase requirements is highly underserved. An appropriate focus towards tech-based credit evaluation and compliant sourcing of funds can help capture and penetrate this market big time."

KrazyBee's current portfolio includes e-commerce purchase, cash credit, two-wheeler credit, college semester/tuition fees credit among others. The current segment being served comprises of young professionals and UG/PG students under the age of 30. KrazyBee currently has more than 3 Lakh registered users out of which over 50,000 active confirmed users are using the platform regularly. KrazyBee currently operates in close to 800 colleges in India. In each of these colleges, they have one or more student Campus Managers, depending on college strength. Currently there are nearly 1000 Campus Managers across all the cities. Apart from having an Android & iOS app of KrazyBee for customers (with 3 Lakh + installations), KrazyBee has an app exclusive to its army of Campus Managers. This app is used by the CMs to do the customer KYC. The UX is very seamless, and helps CMs close the entire KYC within 150 seconds. KrazyBee has also come up with an option for the customers to e-verify themselves after completing their profile. All they needs is their phone number to be linked to their Aadhaar Card.

KrazyBee raised 2M USD in Seed Round during June 2016 from Fenqile (the largest micro-lending platform for young adults in China) and VC Firm YeahMobi. During December 2016, KrazyBee raised a Pre-Series A funding of US$ 3M from VC Firm Plum Ventures (followed by seed round investors). The micro-lending platform has been operating across Bangalore, Hyderabad, Pune, Mysore and Vellore, and has recently expanded to Mumbai, Chennai, Coimbatore, Nagpur, Nashik and Manipal. As of today, it processes nearly 1700 loan applications every day, and boasts of an NPA score of less than 1%. Till date, a credit line of over Rs 150 Crore has been rolled out by KrazyBee in less than 18 months, out of which over 50% has been utilized. The average size of an e-commerce purchase via the platform is close to Rs 12,000.

KrazyBee was co-founded by Madusudan E. and Wan Hong in May 2016. Madhusudan holds a Bachelor’s Degree in Engineering from National Institute of Technology Karnataka, Surathkal and was previously the Business Development Lead at Chinese telecom equipment and smartphone maker Huawei. Hong is a graduate from Wuhan University of China and has over 10 years of experience in Huawei. Even though Madhusudan is from a Product & Business Development background, he has been into personal finance for nearly 10 years and understands the sector both at a microscopic & macroscopic level. Together with Wan Hong and a few other colleagues from Huawei, he ventured out to build a tech platform that would cater to the young adults of India who require credit in a simple accessible way. The founding team includes graduates from IIM Bangalore, IIM Indore and NUS, among others.

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