Indian digital lending startup EarlySalary is in talks to raise $110 million in a seed round led by private equity firm TPG, a source with direct knowledge of the matter told Reuters.
Norwest Venture Partners will also enter as a new investor in the deal, which involves some existing investors cutting stakes, according to the source, who does not wish to be named as the talks are private.
EarlySalary, which competes with LoanTap and PaySense, offers personal loans of up to 500,000 rupees (around $6,319) for short terms through its mobile app and links to businesses.
TPG and EarlySalary declined to comment, while Norwest did not respond to a request for comment.
Cheap internet plans and the proliferation of online payments have given a boost to India’s fintech industry, leading to an increase in the number of startups offering instant loans through a mobile app.
Globally, digital loans have also attracted big bucks. Investors poured nearly $21 billion into the sector last year, an all-time high and about 90% more than the previous year, according to CB Insights, which tracks private investment.
Founded in 2015 and backed by Chiratae Ventures and Eight Roads Ventures, EarlySalary raised $15.7 million in a January 2018 funding round.
The new funding talks come as India’s central bank tightens regulations for digital lenders after cases of harassment and breaches of creditor privacy by some platforms.
On Wednesday, the Reserve Bank of India issued guidelines that only allow regulated entities such as banks and shadow lenders to disburse and collect repayments on loans.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Subhranshu Sahu)
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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