SUMMARY
The $60 Mn funding round was led by Bessemer Venture Partners, SIG and Citi Ventures
The startup will also use the funding to foray into international markets and to strengthen its product portfolio and the overall platform
The overall Indian fintech SaaS ecosystem has raised more than $868 Mn between 2014 and the third quarter of 2022
Fintech software-as-a-service (SaaS) platform Lentra has raised $60 Mn as part of its Series B funding round led by Bessemer Venture Partners, SIG and Citi Ventures.
The startup will use the funding to foray into international markets including the US and Asia. Besides, Lentra will also deploy the investment for strengthening its products and the overall platform.
Speaking to Inc42, Lentra CEO and cofounder D Venkatesh said that the fundraise will enable the startup to expand to three Asian markets – Indonesia, Philippines and Vietnam. Besides, the fund infusion will also be used to build a war chest for acquisitions that may come in the fintech player’s way.
“We see a massive opportunity for ourselves in the retail assets and business banking areas worldwide…Ten-fold revenue growth and some of the biggest retail banks as our clients now act as markers of our solution architecture. I am excited that our investors see the same opportunity and are confident of our ability to execute.”
Founded in 2018 by Venkatesh and Ankur Handa, Lentra is a SaaS fintech platform that offers digital lending solutions to banks. Essentially, it offers a cloud native full-stack platform that helps banks across the entire lending life cycle from loan origination to cross verifying credit scores and from loan management to fraud check and documentation, among others.
Lentra’s offerings include individual products such as document management system FileX, customer verification flow vKYC, credit enquiring platform MultiBureau, among others.
“Lentra is our first fintech investment in India, and we are very excited about the team’s ability to develop and scale low-friction software solutions for lenders. As a global bank, we look forward to Lentra scaling their products and platform internationally,” said Citi Ventures’ director and APAC lead investor Everett Leonidas.
Lentra makes money from each of its offerings. The fintech SaaS platform charges its clients based on a consumption model, with a specific minimum consumption requirement. Under this, clients have to pay for each transaction that is closed, both across offline and online worlds.
Building On The Experience
While running an outsourced tech project for CIBIL (now TransUnion CIBIL India), Venkatesh realised that the banks were not adept at exchanging data with the outside world and vice-versa.
Realising the inefficiency of the whole process, Venkatesh told Inc42 that he did a minor project that enabled banks to quickly retrieve information from bureaus and feed it to the banks in an automated manner. That product later came to be known as MultiBureau. Eventually, Venkatesh looked at overhauling the whole platform and founded Lentra.
Talking about his journey to build the project, Venkatesh said that talent acquisition was a key challenge.
“You need absolutely top notch talent to help you grow a startup…So, talent is the biggest challenge we have. If we can get great people who know how this business works, we can steer the massive ship that we have now in a good direction and we can go faster. Biggest challenge is people and people retention,” added Ventakesh.
On regulatory issues surrounding the space, Lentra CEO called these challenges ‘routine matters’.
The startup also cited faster deployment of its product and quicker turnaround time for end-users as major challenges going forward.
The Number Game
Lentra claims to serve more than 50 clients, offering its cloud services to more than 40 banks. It processes 3 Mn applications monthly and claims to have processed more 13 Bn transactions worth $21 Bn of loans on its platform.
The Pune-based startup‘s clients include banks such as HDFC, Standard Chartered Bank, IDFC, and Federal Bank. It also caters to non-banking financial companies (NBFCs) such as TVS Credit Services, Tata Capital and Aditya Birla Finance.
Venkatesh said that the startup excited the second quarter (Q2) of the current fiscal year at a run rate of $20 Mn per annum. The startup plans to scale this number to $250 Mn per annum by the end of December 2026.
In the long run, the startup also plans to commence operations in the Gulf Cooperation Council (GCC) region and the English-speaking regions of the African continent.
In 2019, Lentra raised INR 77 Cr in funding from HDFC Bank, Bessemer Venture Partners and others. It followed it up with another INR 7 Cr investment from the banking major in the same year.
This comes barely a couple of days after HDFC Bank announced that it was trimming its stake in Lentra by 3.21% (pegged at nearly INR 54.16 Cr). The transaction is expected to be completed by December 2022.
However, Lentra continues to post heavy losses. It recorded a loss of INR 51.99 Cr in the financial year 2021-22 (FY22). Meanwhile, its revenue has been increasing steadily. Lentra’s revenue stood at INR 71.53 Cr in FY22 as against INR 44.72 Cr in FY21 and INR 27.89 Cr in FY20.
Overall, the fintech SaaS sector in India continues to scale up and has emerged as a lucrative investment opportunity within the fintech sector. The renewed interest comes as banks, financial institutions and other NBFCs look to modernise their operations.
Such has been the positive investor sentiment that Indian fintech SaaS startups raised over $868 Mn between 2014 and the third quarter of 2022. Just days ago, Gurugram-based Monsoon CreditTech raised an undisclosed amount of funding in a round led by HDFC Capital.
Earlier this month, another fintech SaaS platform Decentro bagged $4.7 Mn in a Series A funding round led by Rapyd Ventures. In October, SaaS billing platform Zenskar secured $3.5 Mn in a seed round led by Bessemer Venture Partners.
