Lendingkart acquires personal loans app Upwards; Chinese investor Shunwei Capital to exit

SME-focused digital lending platform Lendingkart has acquired instant loans provider Upwards in a deal estimated at Rs 100-120 crore. This comes amidst the Indian government’s crackdown on loan apps with Chinese links, raising uncertainty about the sector.
 

Lendingkart, however, confirmed to Business Today that Shunwei Capital, one of the investors in Upwards, will be exiting the company following this acquisition. "Shunwei Capital will no longer be part of the cap table," Lendingkart Founder and CEO Harshvardhan Lunia, told BT. 

Upwards offers instant loans up to Rs 3 lakh to salaried professionals via its automated loan underwriting and disbursement process. Its offering is targeted primarily at lower-income segments that have traditionally been underserved by formal credit lenders. It has disbursed loans of more than Rs 500 crore to over 50,000 customers till date. Its other investors include India Quotient and Mayfield Fund. 

Commenting on the acquisition, Lunia said, "Lendingkart’s agenda has always been to support the underserved segment. We have created a sustainable and profitable business with our efforts to provide access to finance to a segment that has long and perhaps still been considered one of the toughest to evaluate and provide support to. With this acquisition, our intent is to expand our services and utilize tech capabilities to bridge the financial gap in the customer loan segment, especially in Tier 2/3/4markets."

"Upwards Fintech is very successful in operating in those markets. It’s their faith in their underwriting that helped them service the tier 3/ 4 segment which sees a huge demand-supply gap – whether it be retail, salaried, or self-employed – through a completely digital and touchless experience," he added. 

Lendingkart has disbursed over Rs 11,500 crore worth of loans to more than 1.6 lakh MSMEs in 4,000+ cities in India till date. It is backed by a clutch of investors, including IndiaQuotient, Fullerton Financial Holdings, Bertelsmann India Investments, Sistema Asia Fund, Mayfield India, and Saama Capital. With the latest buy, it is spreading its wings into the retail loans space. Prior to this, in 2018, Lendingkart had also acquired KountMoney, a lending marketplace that connects creditworthy borrowers across to institutional lenders.
 

Abhishek Soni, Co-Founder at Upwards, said,  “We are extremely elated to team up with Lendingkart. Upwards has created a strong credit product for the low-income segment. With Lendingkart’s credit, capital and distribution capability, we plan to deepen our presence across the country to bridge the massive credit gap in the personal loan market in India.”

Digital lending has been one of the fastest-growing segments in fintech in the last few years, and is poised to account for nearly 60 per cent of the sector by 2030. As per a 2022 PwC report, the online lending segment will grow by 48 per cent in 2023. 

Also read: Adani Enterprises faces risk of Rs 11,574 crore unsecured loan recall by banks

Also read: RBI's repo rate hike: Home loan EMIs set to go up by 2-4%