Zype Secures Rs 90 Million in Latest Funding Round

Mumbai-based digital lending startup Zype has successfully raised Rs 90 million in a new financing round. The funding was led by Japanese venture capital firm Unleash Capital Partners, with participation from existing investor Xponentia Capital.

Funding Milestones

This latest funding comes after Zype’s substantial institutional round of Rs 146 million last year, bringing the total capital raised by the startup to an impressive Rs 236 million. The participation of renowned investors highlights the startup’s potential in the digital loan space.

Advisory Support

Unitus Capital was the exclusive transaction advisor for this funding round, providing strategic insights and support throughout the process.

Loan Disbursement and Growth

Since acquiring a non-banking financing company (NBFC) License in 2023, Zype has been actively disbursing loans, achieving current assets under management (AUM) of Rs 400 million. The company has disbursed a cumulative total of Rs 1,300 million since its inception.

Target Customer Base

Zype primarily targets young salaried individuals, offering unsecured personal loans for various purposes such as wedding expenses, home repairs, and health emergencies. This focused approach sets Zype apart as it competes with other fintech players like Fibe and Kreditbee.

Plans for the Future

Yogi Sadana, the founder of Zype, expressed optimism about the company’s growth trajectory. “With the new funding, we are well-positioned to scale for the next 12 to 18 months without requiring another equity round,” he stated. Formerly the Managing Director at Loan Fintech Startup Cash, Sadana launched Zype in June 2022.

Financial Outlook

As Zype looks to enhance its operations, it aims to achieve higher credit ratings that will improve access to more banks and NBFCs. The startup is on track for an annual recurring revenue of Rs 150 million, with consistent month-over-month profit growth. Sadana anticipates that while FY24 may close with a net loss of Rs 7.3 million, the company plans to turnaround its profitability by year-end.

Market Context and Future Prospects

This financing round arrives during a challenging period for consumer loan startups, particularly after market slowdowns from November to February. With the interest rate cycle turning favorable, Zype is optimistic about growth as the festive season approaches. “We expect significant business during this festive period, as consumer spending traditionally increases,” Sadana noted. The company currently employs a team of 250, emphasizing technology and internal collections efficiency, including an in-house AI lab to explore advanced technologies.