ZAKA VC Supports Yenmo’s Good Loans in India

• Indian fintech Yenmo offers instant low-interest loans secured by mutual fund investments via its user-friendly app
• Predatory lending practices served as an inspiration for the co-founders to build an ethical alternative
• The platform has attracted 100,000+ users and secured USD 45M in mutual fund-linked assets
• Recent USD 1.1M of funding from Y Combinator, ZAKA VC, and others will support product expansion and regulatory progress

This March, the well-known Czech firm ZAKA VC (invested in Webel, among others) participated in the USD 1.1M Seed funding round of the young and aspiring Indian fintech Yenmo. Other investors include Pioneer Fund, Team Ignite Ventures, and Y Combinator as the lead investor, alongside such angel investors as Olivier Porté of Alpha Vantage and Laurent Benhamou.

The Inspiration

Yenmo’s co-founders Ashutosh Purohit (CEO) and Aryan Agarwa (CTO) met during their studies at BITS Pilani in Goa, one of the most prestigious universities in India. Before founding Yenmo in 2022, Mr Purohit worked at Navi, one of India’s fastest growing financial services companies, where he led the mutual fund and insurance arm. In this position, he couldn’t help but notice loans given at really high interest rates—upwards of 25%. Seeing people getting trapped in debt cycles due to high interest rates and harassed to recover the money was in stark contrast to how larger companies and ultra rich customers were serviced loans. The latter groups could enjoy low interest rates and high-class customer service.

This inspired the founder-to-be to build a company that offers excellent customer experience, no harassment, and affordable interest rates to regular everyday people in India at all times. He assembled a team to build a lending company that prioritizes ethics and customer experience over revenue through high interest rates.

According to Mr Purohit’s number, 40% of people taking high interest rate loans had investments in mutual funds, but the procedure of taking a loan against such investments was cumbersome. The Yenmo team saw an opportunity in using tech to simplify this process and make this product accessible to everyone.

‘The Yenmo team identified a clear opportunity, and we believed they brought together the core capabilities needed to disrupt the Indian lending market. The speed with which they executed only strengthened our conviction,’ ZAKA VC’s partner Ján Búza comments.

The Semantics

The name ‘Yenmo’ is an anagram of Money. The idea behind such naming was that Yenmo was eventually meant to become the go-to companion for everything relating to money.

‘A loan can be good or bad. A bad loan comprises really high interest rates—over 25-30%—and employs unethical tactics such as charging hidden fees, employing aggressive recovery methods, and ignoring data security protocols. Good loans, on the other hand, have a low interest rate and employ ethical practices of keeping all costs transparent, maintaining data security, and offering respectful customer support at all times. Due to the low interest rates, good loans can effectively pay off the interest rates if the money was invested into another asset. In our case, the growth in the mutual fund portfolio of our customers is significantly higher than the interest rate they’re paying us. Effectively, the interest for their loan gets netted off,’ Mr Purohit explains.

The Milestones

Launched less than a year ago, the Yenmo app provides instant loans secured by users’ investments. Without selling their assets, users can access funds in under 5 minutes at a fixed interest rate of 10.5%, combining speed, stability, and asset preservation.

Throughout its brief history, the Yenmo app has attracted over 100,000 users who have fetched over USD 45M in mutual fund assets on the platform.

For now, Yenmo remains focused on the huge Indian market where there’s a lot to build and solve. The platform also offers loans to Indians residing abroad and having investments in India. That said, in the long term, the team hopes to offer Yenmo’s services across different geographies. The ambition is to become the gold standard of lending companies globally.

The Ambition

As for the recent investment, it will help Yenmo scale the team to facilitate faster launch of new products. The company also has to procure relevant licenses from the regulatory bodies, and the added budget is apparently beneficial for solidifying the application by showcasing the sustainable business model.

‘We are super excited about the road ahead. The more we build in this space, the more we’re realizing the number of innovative products we can build for Indians soon enough. I think we’ll have more to say soon when we launch some of the products in our pipeline,’ Mr Purohit shares. A quick teaser on Yenmo’s upcoming product is a savings account that offers 2x the average interest rate offered by banks in India.

Yenmo’s good loans mean transforming access to credit in India by making ethical, affordable lending available to everyday people through technology. By enabling instant loans against mutual fund investments at low interest rates, it empowers users to meet financial needs without falling into debt traps. In a market plagued by predatory lending, good loans present a dignified, transparent alternative that promotes financial inclusion and long-term well-being of the society.