Sowing seeds of kindness: LoanZen raises seed funding from angel investors
The online loan platform will use the funds raised via TracxnSyndicate to help small businesses thrive
Bangalore-based P2P business loan marketplace LoanZen today announced that it has received undisclosed amount in seed funding from angel investors through TracxnSyndicate, an online angel network launched by startup discovery platform Tracxn.
The startup plans to use the funding to expand services to other Indian cities such as Mumbai and Chennai by April 2016, and also to scale its engineering and data science teams.
“TracxnSyndicate helped us connect with an eclectic group of Internet entrepreneurs, financial industry experts and notable angels who have helped contribute ideas and connections for the venture. TracxnLabs’ own network and knowledge of the fintech space has been hugely helpful as we built out and launched the product,” Madhu Sudhan, Co-founder of Loanzen, said in a written statement.
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LoanZen was founded by in September 2015 by Sudhan, Venkatesh Sankararaman, and Ritesh Kadwamala, and the company began operations in January 2016.
It helps businesses meet short-term cash-flow gaps by offering them short-tenure (up to 120 days) loans. It targets businesses that are less than three years or have no collateral, which have traditionally been out-of-scope for bank loan.
To use the service, borrowers can check through the LoanZen platform as to whether their business is eligible to receive loans or not.
After they upload banking and accounting information to the platform for credit risk assessment, LoanZen provides terms within three days of data submission. Once the terms are accepted by borrowers, the loan will be distributed within seven days.
“Over the past three weeks, we have had 135 companies applying to us from varied sectors … We are also entering into partnerships with numerous large corporations, who are looking to have the smaller partners in their value chain financed. These open up large number of suppliers for us at one go,” Sudhan explained in an e-mail to e27.
The company reaches out to potential users through online channels and word-of-mouth, apart from the previously mentioned partnership.
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