Paytm will invest further in Creditmate as it reportedly looks to raise additional $5-$10 Mn for the Mumbai based Fintech startup. Last year, India’s largest digital wallet company had invested undisclosed amount in the startup in a bid to give push to its newly lunched financial services business.
According to reports, Creditmate is most likely to use the latest capital infusion to make foray into auto insurance space. The startup specializes in offering instant loans for buying second-hand bikes and claims to have so far approved 10,000 loan applications since its inception in 2016.
Like most other Fintech startups, Creditmate uses special algorithm to correctly assess potential borrower’s credit worthiness. The startup’s average loan size is approximately Rs 52,000. In order to maximize its profit, it has recently started sanctioning loans for new or first-hand two-wheelers as well.
Creditmate seems to perfectly fit into Paytm’s growth plan
Paytm is currently in the midst of aggressively pursuing its non-crore businesses as it looks for new growth opportunities. The company has already started making a big push towards financial services by successfully launching payment bank and making foray into wealth management services. Besides, it has tied up with banking behemoth ICICI Bank to offer short term and interest free loans.
Analysts claim that since the Gurgaon based company is already a market leader in digital wallet space, its inclination to grow further in financial services area is a case of perfect organic growth. However, the Alibaba & SoftBank backed startup may not purely depend on organic route to make a further dent into financial services market. This probably explains the rationale behind company’s decision to invest further in Creditmate.
The digital wallet major has already stated it will seek to leverage Creditmate’s widening loan portfolio and asset valuation technology.