Ummeed In News

Ummeed Housing Finance raises $5.6M in Series B funding from existing investors

Delhi-based affordable housing finance company, Ummeed Housing Finance has raised $5.6 million in Series B funding from existing investors Lok Capital Growth Fund (Lok’s third fund) and Duane Park.

The company plans to use the fresh round of funds to fuel its expansion plans to new locations in North and Central India, make investments in SMAC (Social, Mobile, Analytics and Cloud) technologies, and grow assets under management by six times in the next year.

Last October, the company raised its first institutional fund of $3.5 million from Lok and Duane Park.

Founded in January 2016 by Ashutosh Sharma, who spent 25 years at Citi, HSBC, and Bank of Montreal, Ummeed focuses on providing housing finance access to families with low and informal income. Ummeed is registered with National Housing Bank (NHB) under National Housing Bank Act, 1987

Ummeed has already invested in building a technology platform for loan origination and loan management. In the next phase of technology deployment, Ummeed aims to harness the power of SMAC. It targets to go paperless, deploying tablets in all of its branches that can study the customers, run algorithms for credit scoring, and disburse loans at a faster pace.

Talking about the latest fundraise, Sharma, Founder of Ummeed, said:

“The fresh round of investment comes at a time when Ummeed is ready for scale. We will strengthen our Fintech and move towards becoming a mobile platform. We aim to build scoring modules that can improve operational efficiencies, reduce turnaround time, and build robustness around the credit quality of the portfolio. We would like to thank Lok and Duane Park for their continued support as we gear up for our next stage of growth.”

According to a Monitor-Deloitte study commissioned by World Bank and the National Housing Bank, the potential of the Indian affordable housing finance segment is currently pegged at Rs 8.8 trillion (approximately $135 billion). Topped with this, the Govt of India’s policies like Pradhan Mantri Awas Yojna, promoting affordable housing, is expected to provide further impetus to the segment. This conducive environment gives an immense opportunity for a company like Ummeed to lend to the informal market and gain significant market share.

Announcing the follow-on investment, Vishal Mehta, Co-founder of Lok Capital, said:

“Both the approach to building the business and the proof points on the ground have reinforced our faith in the Ummeed team. We believe Ummeed will become a significant player in the affordable housing space in a short span of time, given the large market size, the founding team’s focused approach, strong underwriting capabilities, and the vision to leverage technology. We are excited about the growth prospects of the company and are happy to further our commitment in Ummeed.”

Ummeed is backed by a team of former Citi Bank professionals, who have experience in commercial banking, credit, and mortgage. Sachin Grover, the Chief Operating Officer, has over 20 years of mortgage experience at Citi Financials, IIFL, and Magma Housing. The operating team of Ummeed consists of professionals with small-ticket mortgage experience at companies like AU Housing, Magma, and Shubham. Bikash Sharma has come on board as Financial Controller with nine years of experience in fundraising, financial modelling, treasury, and finance functions. He has previously worked in Manappuram Finance and Encore Capital Group.

Over the last eight months, the company claimed to have grown exponentially with three branches in Delhi, Chandigarh, and Jaipur and has close to Rs 20 crore assets under management (AUM). Ummeed aims to expand to six new locations across North and Central India, and build AUM of Rs 120 crore by March 2018.