Commerce Dashboard

Go Back

Fintech startup Rupeek gives out $1 billion a year in gold-backed loans

IBEF:  January 12, 2022

Rupeek Fintech Pvt, a company that lends against gold as security, has raised US$ 34 million to help it monetize India's US$ 1.5 trillion private gold stash.

The Bangalore-based company, whose technology connects nearly a dozen banks to individual borrowers, has secured funding from Lightbox, GGV Capital, and Bertelsmann, bringing its total valuation to US$ 634 million after raising US$ 134 million thus far. According to a statement released Tuesday, Rupeek's yearly loan disbursement rate was US$ 1 billion in December, making it the first among India's asset-backed lending firms.

“Rupeek’s growth trajectory changed dramatically and loan volumes doubled in the second half of 2021," Sumit Maniyar, founder and chief executive officer, said in an interview. “We are the first fintech to hit US$ 1 billion milestone."

According to the World Gold Council, consumers in India, where gold is both a status symbol and a popular investment, own about US$ 1.5 trillion worth of the precious metal, largely in jewellery. According to CLSA estimates, gold-backed loans account for only around US$ 150 billion, largely from street-corner money lenders and pawnbrokers, with established banks accounting for only 35%. Rupeek is one of a slew of businesses aiming to shake up the centuries-old industry and help Indians put their thousands of tonnes of metal to work.

The business, which is sponsored by Accel and Sequoia Capital, utilises technology to appraise gold supplied as collateral and crunches data to issue loans with monthly interest rates as low as 0.49% and as high as 1.5%. Agents on motorbikes make evaluations in clients' homes to assist borrowers avoid the cultural stigma associated with pledging gold, while teams in offices complete background checks and process the loans online.

“In many cities, our customers get the money deposited in their bank accounts in 45 minutes, the speed of a food delivery order," said Maniyar.

Rupeek, which launched in 2015, aims to expand to more than 120 cities by the end of the year, up from the existing 35. It now offers loans through physical branches as well as a new gold-backed credit card, in addition to doorstep lending. It has commenced co-lending with banking partners after acquiring a non-banking financial company licence from Indian regulators. The funds raised will be used to expand the company's lending portfolio.

“We are extremely capital efficient and have got here with less than US$ 100 million of capital," said Maniyar.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.