Pune-based fintech startup Bon has reportedly raised funds amounting to $1.1 million (Rs 7.8 crore) in seed funding. The particular round was led by Omidyar Network, Axilor Ventures and Better Capital’s AngelList India Syndicate.
The funds raised by the company will be utilized towards helping the company’s further partnerships with banks, non-banking financial companies (NBFC). Also, it plans to expand its existence to 25 cities across India over the next 18 months and launch its operations in other markets in Asia as well.
“Access to working capital is a real pain point for the growing gig workforce—one that can literally make or break a business of one. In India, where credit cards are not pervasive, this issue is even more prominent, as people don’t really have a safety net to rely on when they don’t have cash on hand,” said Bhasker “Bosky” Kode, founder and CEO of Bon.
Founded in 2017 by Bhasker “Bosky” Kode, Bon facilitates digital credit for workers in the gig economy, like taxi and ride-share drivers and other contractors, many of whom are first-time borrowers of formal credit.
Bon for this purpose uses smart algorithms to process multiple data points on each user and create its proprietary risk assessment, which is used to facilitate access to credit ranging from Rs 500 to Rs 10,000 through partnerships with financial institutions and NBFCs.
“As the next half billion of Indians come online in the coming years, creating growth opportunities for digital businesses and flexible jobs, we expect a huge pool of gig workers to be left behind by traditional financial services providers” said Smita Aggarwal, investments director at Omidyar Network.
The primary goal of the company is to facilitate short-term credit to meet working capital needs for recurring expenses by these workers, who can now swipe the Bon card at a number of merchant locations across the country.