Mumbai-based early stage venture capital Fund house Unicorn India Ventures has announced second investment from Rs 400 crore Fund II in a Hyderabad based Fintech/Blockchain startup ChitMonks. The Company has raised $6,50,000 in a pre-series A round from UIV.
ChitMonks has developed a Blockchain-based product empowering the state government regulators to administerChit fund operations across the state on a private permissioned Blockchain network. They are extending their services to Chit fund companies of any size and anywhere in India,by digitally enabling them with process efficiency (payment collections, online* auctions, eKYC, eSign etc), better underwriting (bank statement analysis, credit profiling, credit liabilities) and making their offerings more inclusive.
Bhaskar Majumdar, Managing Partner, Unicorn India Ventures, says, “Even before the current Covid 19 scenario, we saw the potential in ChitMonks to revolutionize the current antiquated system of the chit fund industry by bringing the whole ecosystem online. It is in-line with our philosophy of investing in businesses which can digitize current processes and make them more transparent and accessible.”
Chit Fund as an asset class has been serving millions of subscribers since ages long before banking expanded to its current state. But as a sector, chit funds and their companies don’t enjoy goodwill from govts, new generation customers and other stakeholders. According to ChitMonks’ research there are about 30,000 registered chit fund companies in India, which are operating registered Chit fund business with approximatelyRs1,50,000 crore AUM (Asset Under Management).
Pavan Adipuram, Co-founder, CEO ChitMonks, says, “Our team comes from a strong finance and tech background hence fintech as a space was a natural choice. Based on our research in the fintech space, we believed that foundational technologies likeBlockchainfor fintech products were redefining the trust and transparency at a new dimension. We believed that such technologies can redefine chit funds and they can re-emerge as a bonafide sector where retail investors can invest and borrow money in a trustless manner.” Getting backing from Unicorn India Ventures lends credibility to our vision and proves that we are not the only one who thinks some old economy sectors need a new age shake up and a pinch of technology to usher them in the digital transformation world and beyond, he adds.
The funds raised will be used for product development, market expansion, strategic hiring and further investment in scaling up the current business.