The Money Club Raises $1.7Mn Pre-Series A Round From SOSV, Venture Catalysts And Others The Money Club will use the funds to bolster its technology platform and operations

The Money Club, a fintech startup that has built an AI-based P2P group savings platform to enable the lower-middle-class population to save, borrow and invest digitally, on Tuesday announced that it has raised $1.7million in pre-Series A round from SOSVand Venture Catalysts. The round saw participation from other investors including Blume Founders' Fund, LetsVenture, Keiretsu Forum, Rockstud Capital, Astarc Ventures, and LIV Advisors Ltd.

The Money Club will use the funds to bolster its technology platform and operations.

"Users have been pooling money for over 700 years and this market has been growing 15 per cent CAGR for the last 10 years. High onboarding barriers and lack of innovation in savings products have driven 180 million in India to resort to pooling funds illegally in the form of committees, beesi, chitty, and chit funds and expose themselves to fraud and loss of their hard-earned money. Our vision is to make a Savings product that is relevant, lucrative, safe, secure, and transparent for over 40 crore low middle-income people of India. We want to build the world's largest AI-embedded Money pooling platform from Bharat. An overwhelming response from our users and getting oversubscribed in this round by our investors provide us with the fillip to grow faster," said Manuraj Jain, founder, and chief executive officer, The Money Club.

With the fresh infusion of capital, The Money Club aims to disrupt India's largely unorganized $50 billion chit fund sector and bring greater security and transparency.

"The Money Club has been a pioneer in fostering economic empowerment through its solution, bringing trust and transparency to financial transactions for millions of people in India. We're impressed with the team's relentless focus in tackling this multi-billion opportunity: Money Club's AI-enabled underwriting model is a game-changer that will streamline capital flows for the whole nation," shared William Bao Bean, general partner, SOSV.

Founded by IIT Kharagpur friends, Manuraj Jain and Surajit Ray, The Money Club leverages AI algorithms to effectively underwrite high frequency, micro pooling of funds by studying user behaviors. Acting as an artificially intelligent chit fund cashier in the form of an android app, the startup delivers a higher value proposition to savers, investors, as well as borrowers compared to all other available options in the market.

"Peer-to-peer lending and money pooling clubs have been a part of society for generations now albeit in an unorganized format that's prone to cheating and vulnerable to being influenced by certain powerful members. What we loved is that 'The Money Club' enables this phenomenon with a secure and seamless digital platform thereby providing numerous people with an instrument to save and borrow funds when they need to, without any hassle! We believe Bharat is ready for this age-old practice to be available at their fingertips," stated SaritaRaichura, Blume Founders' Fund.

"We are very excited to be backing the Money Club team. They are bringing an age-old system of how people help each other with money for their needs into the digital age, with a model which works very well. We are truly excited to be a part of money clubs journey ahead and play our part in helping them achieve their vision," commented Salil Musale, managing director, Astarc Ventures.

"Chit funds are one of the oldest forms of borrowing platforms for people who were excluded from the formal financial system. However, they are highly unorganized and are ripe for technological disruption. Money Club is at the forefront driving this change with the use of technology and making its services more transparent and reliable compared to traditional chit fund companies," added Abhishek Agarwal, managing partner, Rockstud Capital.

The Money Club platform has acquired over 200,000 users and has grown 500 per cent in the last12 months. The users have pooled around INR 40 crore by forming 17,000 money clubs on the platform to date, the company said.