IIFL helps bridge the funding gap for India’s fintech start-ups
India Infoline (IIFL), a Mumbai-based financial services company which offers home loans, gold loans and business loans, has launched #IIFLDisrupt – an initiative to help prop up India’s early-stage fintechs during the coronavirus crisis.
The firm, whose wealth management arm holds roughly $24 billion in assets under management, says it can help founders in one of three ways: it can invest, offer mentorships, or become a fintech’s first client. None of the aforementioned options are mutually exclusive.
As well as helping founders directly, IIFL says it will also give accelerator and incubator partners across India access to funds, and help them facilitate proof of concept testing – which could also lead to IIFL becoming a first client for some of the start-ups.
“The post-COVID world will see revolutionary fintech disruptions,” says IIFL’s group chairman Nirmal Jain. “We are looking out for Fintech startups that can disrupt the existing chain, digitise [key processes], increase productivity, and boost various aspects of the business.”
The programme lists the areas it will help start-ups in: wealthtech, insurtech, robo-advisory, transaction technology, distribution of mutual funds (MFs), wealth management, digital content, lending, data analytics, and payment solutions.
Whilst India and China have the highest fintech adoption rates (87%) in the world according to a March report by ResearchandMarkets.com, fintech and blockchain advisor Efi Pylarinou noted last month that the start-ups receiving funding from venture capitalists during the crisis are largely or solely the revenue-generating ones.
IIFL seems to be plugging this gap, focusing on the fintechs which are just starting out, have no or very little funding, and no clients, and are just entering accelerators or incubators to test their products.
“There’s been a liquidity gap for many fintech and healthtech companies following COVID-19 and many great companies can’t scale because of it,” Global Acceleration Ventures’ CEO told Crowdfund Insider.
“The purpose of this program is to help those aggressive companies find the funding they need. In addition, these CEOs and founders will get access to a network of global resources and a knowledge base that will help them grow at an even faster pace.”
IIFL has a significant footprint in India, with roughly 2,366 branches across more than 50 cities. Its profit after tax for the last financial year stood at $65.26 million. Its loan assets grew 9% year-on-year roughly $5 billion.