EarlySalary, an online company which offers salary advances and instant cash loans, has announced its Series B funding of Rs. 100 crores led by Eight Roads Ventures India. Existing investors IDG Ventures India, Dewan Housing Finance Corp. Ltd. (DHFL) and seed investor Ashok Agarwal also participated in the round.

In 2017, the company had raised Series A equity funding of $4 million (around Rs 25 crore) from IDG Ventures India and Dewan Housing Finance Corp (DHFL).

What it charges customers

EarlySalary charges Rs 9 per Rs 10,000 a customer borrows per day. Akshay Mehrotra, CEO of the company, had said last year it typically customers repay loans within 7 days up to 30 days. So for a 30-day loan, a customer is charged an interest of Rs 270 on a principal of Rs 10,000.

This translates to around 2.7% interest per month or around 30% per annum. Credit cards in India charge an interest in the range of 1.5% to 2.99%. But Mehrotra had said that per annum interest calculation does not work for their business as they are looking to lend only for short periods. This essentially makes EarlySalary a high interest, short-term, unsecured loan.

In a note, to the press, the company said its goal is to accelerate its growth plans and target 100,000 loan disbursements per month by the end of 2018. The venture says has disrupted the way young Indians are borrowing, replacing borrowing from friends, family and employers with borrowing real-time through a Mobile App from the comfort and convenience of their homes, and seeing money credited to their bank accounts instantly. The company has, for the first time, provided access to short-term loans to young working professionals even without a credit bureau rating, using social media surrogates for risk assessment and machine learning scorecards for faster loans approvals.

EarlySalary has competition

EarlySalary is not the only game in town as many other digital platforms have joined the lending space recently. The company competes with the likes of ZipLoan, LendingKart, MoneyTap and LoanMeet amongst others.

ZipLoan had raised a total of Rs 24 crores in two separate rounds of funding and LendingKart raised $10.51 million (around Rs 70 crore) last year.

Also last year Lendingkart had announced a partnership with credit bureau TransUnion CIBIL. This allowed self-employed professionals and small businesses will be able to access loans from Lendingkart Finance on the CIBIL MarketPlace platform.