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Received through Angel Network TracxnSyndicate, the fund will help the loan platform help small businesses thrive

Bangalore-based P2P business loan marketplace LoanZen today announced that it has received undisclosed seed funding from angel investors through TracxnSyndicate, an Internet-first Angel Network launched by Tracxn, which helps promising startups raise funding from value-added angels.

The startup plans to use the funding to expand services to other Indian cities such as Mumbai and Chennai by April 2016, while also scaling up its engineering and data science teams.

“TracxnSyndicate helped us connect with an eclectic group of Internet entrepreneurs, financial industry experts and notable angels who have helped contribute ideas and connections for the venture. TracxnLabs’ own network and knowledge of the fintech space has been hugely helpful as we built out and launched the product,” said Madhu Sudhan, Co-Founder of Loanzen, in a written statement.

Also Read: Bank loan or Kickstarter? Here are 7 ways to get funding for your startup

LoanZen was founded by Madhu Sudhan, Venkatesh Sankararaman, and Ritesh Kadwamala in September 2015, and the company began operating in January 2016.

It helps businesses meet short term cash-flow gaps by offering them short tenor (up to 120 days) loans. It targets businesses that are less than three years or have no collateral, which have traditionally been out-of-scope for bank loan.

To use the service, first borrowers can check through LoanZen platform whether their business is eligible for the loans or not.

After they upload banking and accounting information to the platform for credit risk assessment, LoanZen then provides terms within three days of data submission. Once the terms are accepted by borrowers, the loan will be distributed within seven days.

“Over the past three weeks, we have had 135 companies applying to us from varied sectors … We are also entering into partnerships with numerous large corporations, who are looking to have the smaller partners in their value chain financed. These open up large number of suppliers for us at one go,” Sudhan explained in an e-mail to e27.

The company reaches out to potential users through online channels and word-of-mouth, apart from the previously mentioned partnership.

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