[Funding Alert] BASIC Home Loan Raises $500,000 In Seed Round
The startup aims to change the way the nation finances its affordable homes
Gurugram-based BASIC Home Loan, an arm of Basic Enterprises Pvt. Ltd has raised a $500,000 in seed round from Picus Capital, a Germany based early-stage technology investment firm.
The startups’ vision is to digitize the home loan process and increase affordable loan penetration for middle and low-income households in India. It aims to use the 'Phygital' approach in creating a network of agents who utilize BASIC’s technology in handholding consumers, from 'research' to 'final disbursement' of home loans.
“We want to make the home loans process faster, stress-free, and basic for consumers. During a home loan process, especially affordable housing, a customer has to go through multiple touchpoints, which is a pain. We are working to ensure that our tech-enabled agent handholds them through this process of fulfillment from 'documentation' to 'disbursement' as their single point of contact. With support from Picus Capital's funds and ecosystem, our focus will be on changing the way how Bharat (India) finances its affordable homes,” said Basic Home Loan co-founder and chief executive officer Atul Monga.
In its first month of operations, the establishment has sourced $6 million in loans for Indian borrowers and sanctioned $3 million so far. It aims to cross $60 million loan disbursals in the first year of operations. Currently, it is setting up distribution and sourcing applications for lenders but wants to create its own book for affordable housing loans, in the long run.
“We believe that Basic Home Loan has a very unique proposition to solve a very basic problem that consumers face i.e. quick formal finance access for affordable home purchases in India. Their platform will bring transparency for affordable home buyers, and better decision making when choosing their finances. The Indian lending market has huge automation opportunities, and we want to support Basic Home Loan in fully tapping that potential,” added Picus Capital partner Oliver Heinrich.
BASIC has been co-founded by Atul Monga and Kalyan Josyula with Pranav Khattar and the three have worked with companies such as Policybazaar.com, Ola, Lazada, Credit Suisse, HDFC Life, Wadi.com in the past.
As per the Reserve Bank of India (RBI) estimates, the current size of the home loan market is about $250 billion and is increasing at 20 per cent year-on-year. The government's vision is to provide 'housing for all’ by 2022. This translates to 20 million additional homes for LIG and EWS households to be built by 2022. BASIC Home Loan believes there is a big opportunity to tap this underserved segment leveraging technology.