Jai Kisan, an Indian startup trying to bring financial services to rural India, where commercial banks have single-digit penetration, said on Monday that it has raised $ 30 million in a new round of financing as it seeks to scale its business.
Today hundreds of millions of people in India live in rural areas. Most of them have no credit score. The professions in which they work, mainly agriculture, are not considered a business by most of the lenders in India.
These farmers and other professionals also do not have a documented credit history, putting them in a risk category for banks to grant them a loan.
Much of the credit these people get ends up being invested in unproductive use, leading to higher interest rates and default.
Three-year-old Jai Kisan, based in Mumbai, is trying to address this by treating farmers and other similar professionals as businesses rather than consumers.
The startup has developed its own system, which it calls Bharat Khata, which is helping individuals and businesses gain access to cheaper financing and ensuring that the money they raise is used for agricultural inputs and equipment and other generation purposes. income and empowerment of rural areas. commercial transactions.
Arjun Ahluwalia, co-founder and CEO of Jai Kisan, said that financial services are crucial for these people as their entire economy depends on them. “The ability to buy now and pay later is the way most people buy things in India. Credit is an expectation of the Indian customer, it is not a value-added service, “he told TechCrunch in an interview.
“If formal financing is available for clients, it is not just the client that is doing well. The whole ecosystem that revolves around customer benefits, ”he said, pointing to the rise of Bajaj Finance, which has helped several companies prosper in India by providing credit to customers at the time of purchase, and Xiaomi , India’s largest smartphone provider, which sells a large number of its devices to customers on monthly payment plans.
Ahluwalia at a conference in 2019 (India FinTech Forum)
The Bharat Khata service, which launched in April last year, captured more than $ 380 million in annualized GTV execution rate in more than 25,000 storefronts for the financial year that ended in March this year, the startup said.
“Jai Kisan has financed more than 15% of the transactions, reflecting the monetizability and quality of the trade that is being captured. The ability to have high quality transaction visibility and virality has enabled Jai Kisan to scale the business by more than 50% in 3 months. The unprecedented growth trajectory is testament to Jai Kisan’s capabilities to efficiently deploy capital by targeting clients’ credit needs, “the startup said.
The startup, which operates in eight Indian states in South India, is now looking to scale its presence across the country and also increase the headcount. On Monday, he said he had raised $ 30 million in a Series A round led by Mirae Asset, Syngenta Ventures and existing investors Blume, Arkam Ventures, NABVENTURES, Prophetic Ventures and Better Capital.
An unspecified amount of the financing was obtained as debt from Blacksoil, Stride Ventures and Trifecta Capital.
“Jai Kisan is about to disrupt the rural finance industry and we are pleased to be a part of its growth story. Jai Kisan’s stellar growth, excellent asset quality and expanding footprint make them a highly differentiated player in the segment, ”said Ashish Dave, CEO of India Venture Investments for South Korean firm Mirae Asset.
“Mirae Asset has always believed in supporting companies aspiring to become category leaders, which is evident in our other investments and we believe Jai Kisan is on track to do so for rural finance,” he added.
Like most fintech startups, Jai Kisan has so far relied on his banking institutions and other financial institutions to finance business credit. The startup said it will now finance 20% of all loans on its own. That is why you are also raising some money in debt in the new round.
