PayU, Alpha Wave Incubation head $12 million investment round in indiagold

IndiagoldIndiagold, a platform that offers gold loans, digital gold and other services said on August 27 that it has raised $12 million in its Series A round of funding. The round was led by financial services fintech PayU and Falcon Edge Capital-managed Alpha Wave Incubation (AWI). This mark’s PayU’s the first investment in the online gold space.

The round also noticed participation from Better Tomorrow Ventures, 3one4 Capital, Zerodha-backed Rainmatter Capital, and existing investor, Leo Capital.

Indiagold was founded in 2020 by Deepak Abbot and Nitin Misra, both of whom worked with Paytm as Senior Vice Presidents until 2019. The firm provides gold-backed loans, gold savings, and gold locker services to over a million customers.

The co-founders stated, “India offers a large $650 billion addressable gold loan market which is highly fragmented and currently dominated by the informal segment. Even the formal segment hasn’t adopted digital practices at scale. Indiagold’s suite of financial products bridges this critical need gap by digitally transforming lending against gold.”

The gold financing business in India is predominantly offline, with the informal sector accounting for 70 per cent of gold loans. These loans address the liquidity needs of Indians without access to unsecured credit, which is availed by less than 10 per cent of the total working population.

The firm said that it offers fast, safe & convenient solutions to monetize household gold to meet specific credit needs, and is emerging as an alternative to India’s unorganized gold loan market.

“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,” Misra and Abbot further said.

On the investment, Vijay Agicha, Global Head of Strategy and Growth at PayU stated, “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.”

“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,” stated Navroz D Udwadia, Co-founder of Falcon Edge Capital.

With this round, indiagold has raised a total of $14 million. The last seed funding round of $2 million included investors like Cred Founder and CEO Kunal Shah, Snapdeal Co-founder and CEO Kunal Bahl, Pine Labs CEO Amrish Rau, BharatPe Co-founder Ashneer Grover, Blume Founders Fund, Smile Group’s Manish Vij and Ramakant Sharma, besides Leo Capital.

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