Singapore- and Bangalore-based online microlending platform Milaap Social Ventures has raised $1.1 million (around Rs 6.6 crore) from Singapore-based Jungle Ventures and others for development of the platform and scale up its operations with more marketing and engineering, according to a company statement.
Other investors include Toivo Annus (co-founder and former head of engineering, Skype), LionRock Capital (a Singapore-based family investment office), Jayesh Parekh (managing partner, Jungle Ventures; also co-founder, Sony Entertainment Television) and existing investor Unitus Seed Fund (USF).
As part of the investment, Hari Kumar, partner, LionRock Capital and Parekh, who was also a board member of Song Investment Management Company (a fund owned by Soros Economic Development Fund, Omidyar Network and Google) have joined the board of the company.
Prior to this funding, Milaap raised $250,000 in seed investments from USF, First Light Ventures, Vijay Shekhar Sharma (founder, One97) and Rajiv Madhok (founder, Oorja). The company was started in June 2010 and to date, the platform has facilitated loans worth $800,000.
"I have known the founding team of Milaap for the past few years. Enabling crowd funding in Asia comes with its own set of challenges and they have shown good traction early on," said Parekh.
Milaap is a micro-lending organisation that does fundraising from people and disburses those funds as loans to businesses in India. These loans are fully repaid to the lenders over 12-24 months. However, lenders only get back the principle. Milaap charges an interest rate which is just half of what borrowers would have to pay to a bank and this goes to cover the cost operations for Milaap.
The company is targeting about 480 million unbanked Indians mostly living in the rural and semi-urban areas.
"Asia has the largest pool of people who do not have access to traditional banking systems. We are tapping on the long tail of the Internet and disrupting how people—either individually or through their activated social networks—can raise and provide capital to the millions who are unbanked," Sourabh Sharma, CEO and co-founder of Milaap, said.
Founded in June 2010, Milaap was set up by Sharma and Anoj Viswanathan (both graduates from the National University of Singapore), along with Mayukh Choudhury, a post-graduate from IIM Lucknow.
This is one of a few India-specific crowdfunding initiatives launched last year. Earlier, San Francisco-headquartered crowdfunding microlender Kiva launched its first service in India.
(Edited by Joby Puthuparampil Johnson)