Bangalore-based Finovation Tech Solutions Pvt. Ltd, which runs student micro-loan platform KrazyBee.com, has raised $2 million in seed funding from two Chinese firms.
"We have raised the funds from Chinese mobile ad network Yeahmobi and micro-loan/e-commerce player Fenqile," Wan Hong, co-founder, KrazyBee told Techcircle.in.
Currently operating in Bangalore, the company is planning to use the funds to expand its services to other cities. The funds will also be used to launch an Android app, besides improving its risk evaluation model..
"There is a huge opportunity in this sector and the team has the potential. We are looking forward to make more investments in the Indian market," said Jessica Wong, vice-president, Yeahmobi.
China's Fenqile is a micro-loan site that allows users to borrow small sums of money to buy things on affordable short- and long-term payment plans.
Founded in 2015 by Hong and Madhusudan E, KrazyBee offers flexible installment-based purchases exclusively to college students with no credit history or credit cards. The startup wants to focus on the student segment and will be building a merit based credit score system and the proprietary credit score will be used to asses a student's capability to repay the installments.
Madhusudan E holds a bachelor's degree in engineering from National Institute of Technology Karnataka, Surathkal and was previously the business development lead at Chinese telecom equipment and smartphone maker Huawei. Hong is a graduate from Wuhan University of China and has worked for over 10 years of experience in Huawei.
"India has over 30 million students as of 2015. This number is expected to grow to 65 million by 2020. The students are well aware of the e-commerce ecosystem and that is the market we want to tap," added Hong.
According to Madhusudan, nearly 21% of all the orders placed on Flipkart in 2015 were by students in the 18-22 years age group. "Students lack credit facility, however small, to buy products and we want to empower them to purchase products online," he said.
KrazyBee sells electronics items such as smart phones, cameras and mobile accessories as well as apparel such as branded clothes, shoes and watches to college students on flexible equated monthly installment (EMI) plans. A nominal interest is charged per transaction. It has tied up with leading e-commerce players such as Flipkart, Paytm, Amazon and Snapdeal and offer their products to students on EMI.
The firm claims that more than 10,000 students have registered on its platform in the last one month.
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