Bengaluru-based Rupeek, that operates an online marketplace for buying gold loans, has raised $30 million in a funding round led by investment firm Bertelsmann India. The funding will be completed in two trenches, and will be used towards product development and market expansion, as said by the company in a statement on Monday.
Started as an asset-backed lending marketplace in 2015, Rupeek leverages technology to operate with a branchless model. It also offers a 30 minute doorstep service for gold loans, along with on-demand pickup and return of the valuables.
Rupeek claims it has been disbursing gold loans at an annual run rate of more than $150 million at present, has been growing at a rate of 20% month-on-month. The startup counts banks like Federal Bank and Karur Vysya Bank amongst its trusted lending partners.
Existing investors Accel Partners and Sequoia Capital India also participated in the round.
“We would like to bring transparency in the lending space and protect retail investor interest at all costs. We will be using our proprietary tech hardware to ensure standardization, fairness, and scalability in gold purity assessment. The investment will also help us rapidly scale across new markets,”
said Sumit Maniyar, founder and chief executive, Rupeek.
“Gold is integral to the Indian way of life and monetization of gold assets in the country represents a massive opportunity. Rupeek is perfectly poised to capitalize on this unique opportunity based on its innovative business model,” said Anand Daniel, partner at Accel.
“The belief that Rupeek was uniquely positioned to disrupt the gold loan market is what led to Sequoia India’s early partnership with them“, said G.V. Ravi Shankar, managing director, Sequoia Capital India.
“Their efficient use of technology to scale the credit evaluation and disbursement process has resulted in over 10x growth in the last 12 months. Today, their business model is contributing significantly towards creating a strong value proposition for banks to provide credit access to small businesses at affordable rates,” he added.
The organized gold loan disbursal in India has been estimated at $90 billion per year, as per the company. India currently holds 27,000 tonnes of gold worth more than $1 trillion, out of which only 6-7% is monetized through the organised market. The unorganized market is estimated to be three times the size of the organized gold loan market.
India currently imports 750 tonnes of gold annually without contributing to the GDP multiplier as most of the imported gold sits idle in the form of jewellery. Rupeek believes that gold loans can be an effective gold monetisation mechanism.
In February, the startup had raised $6.8 million in Series A round led by Accel Partners.