Gold loan startup Yellow Metal has raised Rs 24.83 crore or a little over $3 million in a Seed I round led by MSA Capital. With this, the Bengaluru-based company marks its first round of funding in 2022.
The board at Yellow Metal has passed a special resolution to issue 1 equity share and 3,662 Seed I compulsory convertible preference shares (CCPS) at an issue price of Rs 67,773 per share to raise Rs 24.83 crore or $3.02 million , according to regulatory filings with the Registrar of Companies (RoC).
MSA Capital led the financing round with Rs 9.92 crore followed by WaterBridge Ventures and Spiral Ventures who infused Rs 7.20 crore and Rs 6.20 crore respectively. LetsVenture through LV Angel Fund and Java Capital through Csquare Venture Partners Fund also participated in the round and invested Rs 80 lakh and Rs 70 lakh respectively.
In November, the company also passed a special resolution to create an employee stock option pool (ESOP) under the employee stock option scheme 2022 with 1,465 stock options convertible into the same number of equity shares. According to Fintrackr‘s analysis, their ESOP pool is worth around Rs 10 crore.
According to FintrackrEstimates put the company at around Rs 125 crore or $15 million (post-money). The company has raised approximately $3.53 million to date with its Seed round of $514K in October 2021.
Founded in 2020 by Rahul and Nikhil Boggaram, Yellow Metal empowers rural India with a simple gold loan within 30 minutes at their doorstep with zero processing fees and an interest rate ranging from 0.79% to 1.75% per month.
Following the allotment, MSA Capital, WaterBridge Ventures and Spiral Ventures hold 7.99%, 12.45%, and 5% stakes respectively. The complete shareholding pattern can be seen below:
Yellow Metal remained a pre-revenue stage company till FY21, but posted a total profit of Rs 6.34 lakh with Rs 1.6 lakh operating revenue in FY22. As per the annual financial statements to the RoC, the startup recorded a loss of Rs 62.8 lakh in FY22.
The two-year-old platform competes with the likes of Indiagold, Rupeek, and Ruptok.
Recently, Indiagold shut it down $22 million round while Rupeek is in late-stage talks to raise $50 million from existing supporters. According to a reportthe gold loan market in India is estimated to reach around $77.5 billion by 2025 with a compound annual growth rate (CAGR) of ~12.75% during 2020-2025.