Indiagold, a platform that offers gold loans, digital gold, and other services, said on August 27 that its Series A round of fundraising has raised $12 million. PayU, a financial services company, and the Falcon Edge Capital-managed Alpha Wave Incubation led the round (AWI). This is PayU's first foray into the world of online gold.

Better Tomorrow Ventures, 3one4 Capital, Rainmatter Capital, which is backed by Zerodha, and current investor Leo Capital also participated in the round.

Deepak Abbot and Nitin Misra, who both worked as Senior Vice Presidents at Paytm till 2019, created Indiagold in 2020. Over a million consumers use the company's gold-backed loans, gold savings, and gold locker services.

The co-founders stated, “India offers a large $650 billion addressable gold loan market which is highly fragmented and currently dominated by the informal segment. Even the formal segment hasn’t adopted digital practices at scale. Indiagold’s suite of financial products bridges this critical need gap by digitally transforming lending against gold.”

In India, the gold financing industry is primarily offline, with the informal sector accounting for 70% of gold loans. These loans provide liquidity to Indians who do not have access to unsecured credit, which is used by less than 10% of the working population.

The company claims that it provides "quick, safe, and convenient" alternatives for monetizing household gold to satisfy specific credit demands, and that it is gaining traction as a viable alternative to India's unorganised gold lending sector.

“We are proud to have the backing of industry-leading growth investors and take it as a reaffirmation of the inherent strength of our value proposition. With the support of our existing and new investors, we are moving aggressively towards our larger vision of establishing gold holdings as an alternate credit score, and creating a gold back credit platform for lenders to provide instant credit against gold,” Misra and Abbot further said.

On the investment, Vijay Agicha, Global Head of Strategy and Growth at PayU stated, “We are very impressed with Deepak and Nitin's proven record of developing financial products at scale and have faith in their ability to build a profitable business. We believe that indiagold has the unique opportunity to expand the addressable market on the back of its product offerings and scale the business up significantly.”

“Gold, found in almost every household in India, is the key to provide affordable credit to every Indian. Indiagold’s doorstep gold loan and gold locker products enable it to offer credit at more affordable rates. We believe the gold loan market is ripe for disruption and are thrilled to back Indiagold’s founders,” stated Navroz D Udwadia, Co-founder of Falcon Edge Capital.