Deals: Student microlending startup Buddy raises $500k from Tracxn Labs, Blume and others
Buddy plans to use the latest round of funding to expand its credit risk and technology team so as to build necessary infrastructure to support its growth. It also aims to build a stronger presence in colleges through offline marketing channels, which will enable Buddy to capture a major proportion of the online spending of students.
According to a company release, it is already in talks to raise Series A funding to scale up operations, and work on upcoming product features.
Buddy enables college students to buy e-commerce products via short- and long-term payment plans. It has partnerships with e-commerce players including Flipkart, Amazon and Snapdeal. Students can choose the length of the plan, ranging from 3 months to 18 months, and the interest rates vary accordingly.
Students need to submit their ‘Student ID’ and phone numbers of a classmate as well as one of their parents to apply for Buddy. Borrowers who miss deadlines will receive messages from Buddy’s risk-management team.
“Educating students to a loan product and inculcating the responsibility of repayment is a huge game changer that Buddy is creating. We believe that Buddy has the potential to create a meaningful and trustworthy student rating system that will have far reaching consequences.” says Adit Parekh, Principal, Blume Ventures.
Buddy, which started operations in January, claims to have presence across over 100 colleges in Bangalore, and 5,000 active students on its platform over the last six weeks of operations. Buddy also has a mobile app, which provides students with an added mode of interaction.