Snapmint, a Mumbai-based fintech firm dealing with pay-later solutions in online purchases, has been able to raise $125 million in a mix of equity and debt funding. General Atlantic BeyondNetZero climate growth fund led the round; other investors involved were Kae Capital, Pravega Ventures, and others. The strategic investment will support the mission at Snapmint to democratize access to credit to underserved consumer groups in India. With the ongoing rise in digital commerce, the innovative pay-later model of Snapmint may be instrumental in determining the future of consumer finance in India. 

Business model and latest funding round

Snapmint was established in 2017 by Navin Honagudi and Chirag Patel. Snapmint provides consumers who shop online with zero-cost EMI solutions. The platform allows users to divide payments into installments without a credit card, which is particularly appealing to millennials and Gen Z consumers who cannot access traditional credit.

The $125 million raised consists of $20 million and $105 million in debt. Its equity component was attended by BeyondNetZero by General Atlantic, a specialist in climate-oriented investments, as well as current investors Kae Capital and Pravega Ventures. Debt financing was raised through institutional investors and NBFCs, which showed high confidence in the business model and growth path of Snapmint.

This is the second round of funding this year, and it was an important milestone in Snapmint achieving a total of $35 million of equity since it was established. The new capital will enable the company to scale its operations, increase its products, and expand to more locations in India, with a preference for Tier 2 and Tier 3 cities.

The innovative underwriting model of Snapmint uses other alternative data to determine creditworthiness, like mobile usage data, app activity information, and transaction history details. This strategy will enable the firm to cater to first-time credit users and individuals who are not part of the formal banking system, in line with the objective of financial inclusion.

The startup has collaborated with more than 27,000 merchants, comprising giant e-commerce sites and direct-to-consumer brands. Its smooth connectivity with merchant sites allows them to get credit and check out instantly, increasing the customer experience and improving the conversion rates of retailers.

The Co-founder of Snapmint, Nalin Agrawal, said, “We believe India will leapfrog credit cards and go straight to EMI on UPI, With this new funding, we are excited to have General Atlantic join our journey to bring EMI payment solutions to over 100 million consumers.”

Quotation Source: moneycontrol  

Impact and key investors

Snapmint boasts of having served more than 6 million customers in the past, a large number of whom are new-to-credit users. The firm has experienced fast growth in the volume of transactions because of the growing demand to have greater flexibility in payment methods, increasing the digital adoption in small towns.

The investment philosophy of BeyondNetZero is also aligned with the line of vision of the fintech company, which focuses on climate-conscious lending. Snapmint helps create a more sustainable financial ecosystem by encouraging the use of digital payments and minimizing cash-based transactions.

Early investors, Kae Capital and Pravega Venture, reaffirmed their belief in the vision of the company. They highlighted the fact that Snapmint has the potential to open up consumer demand by using responsible lending and merchant relationships.

The involvement of institutional debt investors also confirms the risk management abilities and the efficiency with which Snapmint operates. The low default rates and strong repayment structures have seen the company become a trusted lending partner.

The Managing Director and Head of India of General Atlantic, Shantanu Rastogi, said, “Snapmint has built one of India’s largest EMI-on-UPI platforms with a strong value proposition of affordability for consumers and increased sales for merchants.”

Quotation Source: moneycontrol  

Conclusion

The Snapmint $125 million funding round is a turning point in its quest to reshape consumer credit in India. General Atlantic, Kae Capital, and Pravega Ventures are renowned investors, and their support will enable the company to grow its influence and engage millions of underserved consumers. Through its integration of technology-based underwriting, merchant integration, and climate-conscious lending, Snapmint is not only facilitating access to credit but is also creating a more welcoming and sustainable financial environment.