True Balance, a South Korean startup that runs an eponymous financial service appraised $28 million in a new financing round as it aims at tens of millions of users in small cities and towns in India.
True Balance began as an app to help users easily find their mobile balance, or top up pre-pay mobile credit. But in its five-year journey, the startup has added a range of financial services including online lending and the ability to pay utility bills. Online lending is its core business today.
In an interview with TechCrunch, Charlie Lee, founder, and chief executive of True Balance, said the startup has disbursed over $13.5 million in small loans to over 6.7 million consumers. The size of these loans vary from $6.75 to $675, he said. SoftBank Ventures Asia, Naver, BonAngels, Daesung Private Equity, and Shinhan Capital financed the five-year-old startup’s Series D financing round. The startup, which has headquarters in Seoul and Gurgaon, has raised about $90 million to date.
Its customers don’t have a credit score, which makes it complicated for them to get a loan from financial institutions such as banks. Scores of startups in India and Southeast Asia are experimenting with alternative data such as a phone a consumer owns and the transactions she makes and hundreds of other data points to determine these users’ creditworthiness.
Lee did not reveal how many users it has lent money to have returned the amount but said the figure was so high that the startup is open to engaging with other firms who are looking to make use of alternative data but don’t have the tech stack.
Last year the startup was nearing profitability — a milestone it now hopes to reach by the second quarter of next year. Lee said the Coronavirus, which has severely impacted the financial services sector, also hurt True Balance’s business.
“Before the coronavirus, our business was growing very fast,” said Lee. “The coronavirus and moratorium (enforced by the nation’s central bank) hit us. We utilized this time to improve our collection process and other aspects of the business.”
“We will continue focusing on non-online payment users, non-credit score users, people who deserve our help, but need a way to get to it,” he said. The fresh capital will be deployed to make the startup reach the break-even point and then profitability, he added. True Balance is also working to reach more underbanked users in India.