AdvaRisk, a financial technology startup that focusses on the detection and prevention of fraud, has raised $700,000 (about Rs 4.96 crore) in a seed funding round led by Sprout Venture Partners.
SEA Fund, former Axis Bank deputy managing director Varadarajan Srinivasan and Sharad Bhatia, former managing director at private equity firm Multiples Alternate Asset Management, also invested, AdvaRisk said in a statement.
The Mumbai-based startup, operated by SLO Technologies Pvt. Ltd, said it will use the money it has raised for product development as well as strengthening its sales and business developments teams.
Co-founder Vishal Sharma said the startup was developing solutions that would enable lenders to prevent fraud as well as maximise their recovery from non-performing assets (NPAs).
Sprout Venture managing partner Sahil Gupta said the firm was confident in its investment because AdvaRisk has signed up major banks and non-banking financial companies for its services. “There is a strong need for their products in the financial system considering the rise in NPAs over the last decade,” Gupta said.
AdvaRisk was founded in 2016 by Sharma and Rahul Metkar. It is developing an automated and artificial intelligence-driven platform to prevent and detect fraud, as well as the recovery of corporate loans. According to its website, its products include due diligence and monitoring platform AdvaSmart, recovery platform AdvaNPA and financial information service CorpData.
Investors
Sprout Venture is an early-stage venture capital firm. Its initial and follow-up investments in a venture are usually in the range of Rs 50 lakh to Rs 5 crore.
Companies in its portfolio include health and fitness app Fitso, fintech startup Healthfin and human resources technology startup Advantage Club.
SEA Fund is also an early-stage venture fund that was co-founded by Manoj Kumar Agarwal and Mayuresh Raut. The firm invests in early-stage ventures backed by technology. AdvaRisk is its second fintech investment as it seeks to build a portfolio that leverages the IndiaStack set of technologies.
Fintech funding deals
There has been steady investor interest in the financial technology segment, as companies seek to address the growing need for last-mile delivery of financial services and provide value-added services to consumers across all socio-economic segments.
There were at least two reports of investments in fintechs last week. The United States-based investment firm Tiger Global Management invested $25 million in online stock brokerage Upstox and Silicon Valley-based VC firm Ribbit Capital led a $21.4 million Series B funding round in online investment platform Groww.
Earlier this month, NeoGrowth Credit Pvt. Ltd, a small and medium-enterprises-focused fintech lender, raised $17 million in debt financing from France’s Proparco SA. Similarly, online peer-to-peer lending platform LenDenClub raised $1 million in a pre-Series A round led by Artha Venture Fund.