Lok leads $5.6m Series B for India's Ummeed

Indian trading firm Duane Park also participated in the round, according to a release. Both firms participated in Ummeed’s $3.5 million Series A round in October. The company will use the new capital to expand into north and central India and to improve its technology base.

Founded in January 2016, Ummeed provides financing to low-income families, working in the informal economy, who have difficulty obtaining loans from banks and non-banking financial companies (NBFCs). It provides small loans in the range of INR300,000-2.5 million ($4,500-37,000), aiming to create savings through efficiency by using technology.

From its base in Delhi the company has grown to three cities, with plans to add six more locations across north and central India by next March. Over the same period Ummeed hopes to grow its assets under management from INR200 million to INR1.2 million, and to pursue further savings through a paperless office policy.

“Both the approach to building the business and the proof points on the ground have reinforced our faith in the Ummeed team,” said Lok co-founder Vishal Mehta. “We believe Ummeed will become a significant player in the affordable housing space in a short span of time, given the large market size, the founding team’s focused approach, strong underwriting capabilities and the vision to leverage technology.”

Housing is a high priority of India’s government, which granted infrastructure status to builders of affordable housing in this year’s budget. The measure will make them eligible for state incentives, subsidies, tax benefits and institutional funding, and comes on top of a 2015 program that aims to build 20 million homes in the country. This support is expected to drive a boom in home buying from which finance providers like Ummeed can benefit.

Lok focuses on growth-stage investments in India’s financial services, agriculture, and healthcare sectors, committing $2-10 million per deal. The firm is currently raising its third fund, which reached a first close of $40.5 million last year and is targeting a $100 million final close by the end of 2017.

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• Topics
• South Asia
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• India
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