India staked out a reputation as a key hub for business process outsourcing when it first became known as a tech hub. With the emergence of embedded finance technology, the legacy has taken a different turn with outsourcing of a very different type. The founder and CEO of Lentra said in an interview that the startup has raised $60 million and is valued at $400 million.
The round was led by existing investors as well as strategic participation from Citigroup's investment banking arm.
This is the first investment out of India by CitiVentures, and it shows how far the embedded finance and financial technology has come. Lentra has been growing at a rapid rate. Lentra made $1 million from its "annual consumption rate" in its first year of operation. As of this year, that figure is up to $10 million, and it is projected to hit $100 million in four years.
Commercial banks use the startup to power their digital loan services. IDFC First Bank is one of its key customers. Over 13 billion transactions and $21 billion worth of loans have been processed by Lentra. The startup didn't hire a sales executive until April this year.
A number of other fintechs have thrown their hats into the ring to work with legacy financial services providers, which have found themselves unable to keep up with innovation from faster moving, tech based competitors.
"We want to help and empower the banks, who are our clients, to lend better, lend completely on a digital platform and improve on all parameters."
The parameters are the same for banks around the globe. Banks want to lend more, and to be more accessible to more potential borrowers, which is why they are moving to digital platforms. Banks don't want to take on a lot of bad debt in the process of scaling, so they need better tech to improve how they vet borrowers, and also to have a better grip on forecasting what they might expect to get in
They can do this through a variety of loan tools. Lentra Lending Cloud has modules for clients to use out-of-the-box, as well as a Loan Management System and a no-code Business rules engine. The startup has a platform called GoNoGo that helps banks determine if a loan should be given to a customer once they apply.
INRDeals says that 90 percent of lending frauds occur by way of ID proof thefts, where bad actors impersonate someone with a better credit record to get a loan quickly. Lentra uses artificial intelligence to find fraud attempts.
The founder said that if you solve ID theft fraud, you reduce the approach the bank will have towards a non-performing asset or bad loan.
Lentra's technology has reduced the time it takes for a loan to be approved to a few seconds.
Lentra believes thatSalesforce is one of its biggest competitors when it comes to loan origination.
Anyone who uses Salesforce for loan origination is our top priority. Venkatesh said that they went and latched on to them and then converted them.
India is one of the places that Citi is interested in tapping more into.
"We are very excited about the team's ability to develop and scale low-friction software solutions for lenders, and we are the first fintech investment in India for us." Lentra's products and platform will be looked forward to by us as a global bank.
Lentra plans to use the funding to update its platform, add new features and make it more robust and fast, according to Venkatesh. The startup is going to start its business in Asia, including Indonesia, the Philippines and Vietnam. The startup wants to enter the U.S. after the initial expansion.
The founder said that offices in the three new Asian countries would be up and running in January.
Lentra had an office in the Lion City in June of this year after acquiring TheData Team. The office in Singapore would be the location for the startup to go into the countries of the Association of Southeast Asian Nations.
Lentra wants to improve the offering and expand the business. Robotic process automation, payment systems or solutions that are not regulated entities and teams working on statistical modeling are some of the areas in which the founder said it would acquire.
With effective financial inclusion and credit decisioning, lender is empowering them to fuel the dreams of millions. The commercial advantage that Lentra is delivering to their clients was something that we were very impressed with. They want to become the most trusted and sought after cloud-native digital lending platform, empowering clients in democratizing credit through accurate decisioning and rapid processing.
Lentra doesn't participate in the latest funding round, but it does have an investor in the bank. The bank had to follow the Reserve Bank of India's condition of not holding more than 10% in unrelated businesses because of the merger with the HDFC Group.
Mumbai is the number one market for the startup. To support the plans, it has a team of 500 people.
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