This Sachin Bansal-backed MSME lender becomes first fintech startup to turn profitable in India

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Published: February 1, 2020 8:59:42 AM

Credit and Finance for MSMEs: The fintech lender’s disbursed over Rs 1,000 crores in Q3 FY20 while its asset under management as of the end of December 31, 2019, was Rs 753 crores across 7,512 loans.

U Gro lends customised loans to small businesses in eight sectors.

Credit and Finance for MSMEs: Sachin Bansal-backed small business lender U Gro Capital has turned profitable within 10 months of its business operations. The company reported Rs 6.9 crore in net profit for Q3 FY20 after a loss of Rs 3.3 crore in the preceding quarter, it announced on Friday. The revenue for U Gro Capital went up by 15.4 per cent in quarter-on-quarter growth from Rs 20.5 crore in Q2 FY20 to Rs 23.7 crore. The company, which raised Rs 75 crore from Flipkart’s co-founder in October last year, claimed to be the country’s first fintech startup to earn profit within the first full year of its business.

“We are extremely proud of becoming the first fintech platform to achieve profitability within a year of commencing business operations. This is only the beginning of our story, and we expect to see much greater profitability as our asset engine starts reaping the benefits of the excellent partnerships we have formed,” Shachindra Nath, Executive Chairman and MD, U Gro Capital said.

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The fintech lender’s disbursed over Rs 1,000 crores in Q3 FY20 while its asset under management as of the end of December 31, 2019, was Rs 753 crores across 7,512 loans. U Gro had recently tied up ICICI Bank to offer co-originate loans to SMEs after similar partnerships with SBI and Bank of Baroda. It had also launched the beta version of its proprietary Direct-to-Customer platform — GRO-Direct for businesses to apply for loans via web-based forms or chatbot-assistance.

U Gro lends customised loans to small businesses in eight sectors including healthcare, education, chemicals, food processing/FMCG, hospitality, electrical equipment and components, auto components, and light engineering. These sectors are picked based on  “an 18-month process involving the extensive study of macro and microeconomic parameters carried out in conjunction with market experts like CRISIL,” according to the company. It had raised around Rs 920 crore from a clutch of private equity funds including institutional investors and family offices.

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