Hyderabad-based fintech, blockchain startup ChitMonks has raised $6,50,000 in a pre-series A round from Mumbai-based early-stage venture capital fund house Unicorn India Ventures.
This is the second investment by Unicorn India Ventures from its Rs 400 crore Fund II after SaScan.
Funds raised will be used for product development, market expansion, strategic hiring, and further investment in scaling up ChitMonks' current business.
ChitMonks works with chit fund companies and regulators and offers enterprise private platform for chit fund firms to make their services more streamlined, efficient, and inclusive for their customers.
The startup has developed a blockchain-based product that empowers state government regulators to administer chit 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), better underwriting (bank statement analysis, credit profiling, credit liabilities) and making their offerings more inclusive.
Bhaskar Majumdar, Managing Partner, Unicorn India Ventures, said, "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 that can digitize current processes and make them more transparent and accessible."
Chit fund as an asset class has been serving millions of subscribers long before banking expanded to its current state. But as a sector, chit funds and their companies don’t enjoy goodwill from governments, 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 approximately Rs 1,50,000 crore assets under management.
Pavan Adipuram, Co-founder and CEO, ChitMonks, said, "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 like blockchain for 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 ones who think 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 added.
Founded in 2016, ChitMonks, a product from Pangean Global Services, has a singular vision to make investments in chit funds more accessible, credible and rewarding. Building India’s largest blockchain network for savings and borrowings, ChitMonks synergizes chit fund companies, regulators, subscribers, banks, service providers, ecosystem enablers to drive the largest trusted network of savers and borrowers platform.
Unicorn India Ventures from its first fund has invested in 18 companies like VLCC VanityCube, Inc42, Sequretek, Pharmarack, GrabonRent, Inntot, Genrobotic, SectorQube, Perfit, NeuroEquilibrium, SmartCoin, Open Bank, Boxx.ai, Clootrack and Openapp. Unicorn India announced Fund II, which is a Rs 400 crore fund in 2019.
The Fund House has also launched a UK-India cross border fund for funding UK startups looking to enter India and have invested in 6 such startups so far.
First Published: IST