Rise Fund, Norwest lead $110m Series D for India's EarlySalary
TPG’s Rise Fund and Norwest Venture Partners have led a USD 110m Series D round for EarlySalary, which claims to be India’s largest consumer lending financial technology start-up.
Existing investor Piramal Capital & Housing Finance also participated. It represents a significant lift versus the USD 10m Series C raised in 2020. That round saw Eight Roads India and Chiratae Ventures take 30% and 25.5% stakes respectively. Total funding to date is USD 144m.
Founded in 2015, EarlySalary provides loans of up to INR 500,000 (USD 6,275) to working professionals payable in monthly instalments. The company expanded into the affordability segment and introduced buy now, pay later (BNPL) services to its customer segment with a focus on education, health, and consumer product financing. It is active in 150 cities.
EarlySalary describes its mission as providing a financial ecosystem for the young and aspirational, estimating that although 80% of Indians use banking services, almost 50% don’t have access to credit. The idea is to provide a safe and reliable credit platform to this segment, primarily in tier-three and tier-four cities. BNPL is considered an expansion area.
Recent progress includes the hiring of senior management in areas such as risk, sales, and treasury, as well as milestones of 12m app downloads and 1m customers served. About 2.8m loans worth INR 75bn have been disbursed to date. The company claims to have remained profitable through the pandemic, posting 7x growth in the past two years.
The plan is to improve in-house technology and analytics capacity with a focus on transparency, risk management and customer-centricity. Akshay Mehrotra, co-founder and CEO, said the Series C proceeds would help expand the cash business and drive 10x growth in the customer base.
Financial inclusion is a core focus of Rise Fund’s multi-sector global impact investing strategy. The first iteration of Rise closed at USD 2bn in 2017. A second launched with a target of USD 2.5bn and a final close has yet to be announced.
“By providing modest, short-duration loans at competitive rates, EarlySalary is improving the financial health of its customer base and empowering them to finance things like upskilling courses, healthcare needs, personal emergencies, and short-term cash flow mismatches,” Akshay Tanna, a partner at TPG, said in a statement.
“Akshay and Ashish [Goyal, co-founder and CFO] have built a world-class team and a market-leading product that is poised to continue to meet the needs of India’s rising middle class and we are delighted to be a part of its next chapter of growth.”
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