Indiagold raises $12 million in funding led by PayU and Falcon Edge Capital

Indiagold, a platform that offers gold loans, digital loans, and other services, has announced that it has raised $12 million in a Series A round of fundraising.

PayU, a financial services startup, and the Falcon Edge Capital-managed Alpha Wave Incubation led the round (AWI). This is PayU's first foray into the online gold market.

3one4 Capital, Better Tomorrow Ventures, Rainmatter Capital, which is backed by Zerodha, and current investor Leo Capital all participated in the investment round.

The startup now has a presence in two cities: Delhi and the national capital region (NCR), as well as Indore. The company hopes to extend its presence in 8-10 locations this fiscal year as a result of this financing. It will also use the funds raised in this round of fundraising to expand its on-the-ground operational teams in these areas.

In a second commercial agreement, Indiagold is scheduled to interface with PayU's LazyPay BNPL product and offer EMI-based digital gold purchases to the latter's user base. If the commercial agreement is finalized, PayU's user base would be able to purchase digital gold through Indiagold's backend.

Deepak Abbot and Nitin Misra, who both worked as Senior Vice Presidents at Paytm till 2019, founded Indiagold in 2020. More than a million consumers use the company's gold-backed loans, gold savings, and gold locker services.

In India, the gold financing industry is largely offline, with the informal sector accounting for 70% of gold loans. These loans provide liquidity to Indians who do not have access to unsecured credit, which is used by less than 10% of the working population.

Apart from the basic gold loan, Indiagold also provides services such as digital gold conversion to physical gold at your doorstep and digital gold purchasing via EMIs.

Indiagold also provides gold locker services, in which an executive visits a customer's home and assists them in storing their physical gold assets in secure lockers. The portal also offers protection for these valuables, as well as the ability to borrow money against gold stored in actual lockers.

Misra and Abbot adds, “We are proud to have the backing of industry-leading growth investors and take it as a reaffirmation of the inherent strength of our value proposition. With the support of our existing and new investors, we are moving aggressively towards our larger vision of establishing gold holdings as an alternate credit score, and creating a gold back credit platform for lenders to provide instant credit against gold.”

According to the company, it provides quick, safe, and convenient ways to monetize household gold to meet specific credit needs, and is developing as a viable alternative to India's unorganized gold lending sector.

The company refused to reveal interest rates but indicated that gold loans obtained on its platform vary from $15,000 to a few lakhs.

On the investment, Vijay Agicha, Global Head of Strategy and Growth, PayU states, “We are very impressed with Deepak and Nitin's proven record of developing financial products at scale and have faith in their ability to build a profitable business.  We believe that Indiagold has the unique opportunity to expand the addressable market on the back of its product offerings and scale the business up significantly.”

Navroz D Udwadia, Co-founder of Falcon Edge Capital says, “Gold, found in almost every household in India, is the key to provide affordable credit to every Indian. Indiagold’s doorstep gold loan and gold locker products enable it to offer credit at more affordable rates. We believe the gold loan market is ripe for disruption and are thrilled to back Indiagold’s founders.”

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