Housing finance lender Vridhi Home Finance has secured Rs 150 crore in its first funding round from Elevation Capital, a venture capital firm. With this new capital injection, the lending startup aims to expand its operations, increase its credit lines from larger financial institutions, and venture into new geographical markets. It's unusual for a technology-focused venture firm to invest in a housing finance startup, which typically operates as a traditional, physical business. Mridul Arora, a partner at Elevation Capital, expressed his confidence in the market potential, the company's business reach, and the founder's track record, which led to their investment decision.

Vridhi Home Finance, based in Bengaluru, was established in 2022 by senior finance professionals. The co-founders include Sunku Ram Naresh, who serves as the CEO, Sunil Mehta as the CFO, and Sandeep Arora as the COO. Ram Naresh brings his experience from working with Bajaj Finserv and Aavas Financiers, while Mehta has a background at ICICI Bank and Yes Bank. Arora's prior experience includes positions at Kotak Mahindra Bank and Indiabulls Consumer Finance. The startup has recently obtained its home finance license and currently operates 20 branches with a workforce of approximately 225 employees across Karnataka and Andhra Pradesh.

Ram Naresh expressed, "We received the license promptly, and now we aim to establish a tech-enabled lending business with a strong physical presence, primarily focusing on the affordable housing segment". Vridhi intends to address the home loan needs of consumers in small towns and district headquarters, where the average loan size will be around Rs 8 to 9 lakh. They finance only 50% of the property's value and exclusively provide loans to first-time homebuyers. Sandeep Arora added that the total addressable market size is approximately $300 billion, and with rapid urbanization, housing represents a significant investment asset, and the market remains underserved.

Ram Naresh's vision includes building a branch network of around 40 to 50 branches, investing in a robust technology infrastructure to support the business, and assembling a team of about 400 to 500 employees responsible for customer acquisition, underwriting, and documentation. He emphasized that this business differs from purely digital consumer lending and necessitates a strong physical presence. Technology will drive backend systems, and the company is leveraging advancements in account aggregators and Aadhaar for a digital-assisted onboarding process.

"We are developing systems to facilitate loan disbursements in each tranche within three to four hours", stated Ram Naresh. Home loans are typically disbursed in stages as the building construction progresses, with large banks often taking several days for each disbursement. Vridhi aims to streamline these processes through technology. Observers in the industry have noted that with a crowded unsecured lending sector due to fintech companies, many major investors are seeking opportunities in secured lending. Tech-enabled startups have also emerged in the gold loan sector. Players like Navi are attempting to establish a digital home loan business. With support from firms like Elevation, the growing home loan market may experience significant disruption.