Yellow Metal, a business offering gold loans, announced that it has raised $3 million from backers, including the international venture capital firm MSA Novo. Spiral Ventures, a Japanese investment firm, as well as Java Capital and WaterBridge Ventures, who had previously invested, also took part in the funding round. The business had previously raised $580,000 in a financing round that was co-led by WaterBridge Ventures and Java Capital.

Bengaluru-based Yellow Metal offers doorstep gold loan services across seven towns in Karnataka. It is in direct competition with businesses like Indiagold, which Deepak Abbot and Nitin Misra formed after leaving Paytm. Rupeek and Brave Finance are two other competitors of gold financing in the market.

Yellow Metal said in a statement that the fresh funds will help it expand its technology team and operations across 25 new markets within and outside of Karnataka. It will also add new forms of asset-backed lending that are required for consumers in rural India.

“We are proud first partners of Yellow Metal and excited to continue to partner with Nikhil and Rahul as they set out to become rural India’s most trusted financial services brand,” said Anjali Sosale, partner, Waterbridge Ventures. “Their customer-first thinking and deep operational expertise have helped them scale to over $1 million in monthly disbursements across seven southern Indian towns.”

Yellow Metal, which was created in 2020, also plans to use the funds to improve the functionality of its mobile-optimized proprietary loan management system. Chintamani, Chikkaballapura, Kolar, Dodaballapura, Malur, Hoskote, and Sidlaghatta are the present locations where it is active. It claimed in the statement that it creates 500 new accounts each month.

Yellow Metal combines an existing offline network of agents with technology to give these households access to more affordable financing on a large scale, according to MSA Novo investor Prakhar Khanduja. We are quite amazed by the magnitude Yellow Metal has reached in just one year of operations with a small capital investment. According to the company, it is currently servicing more than 5000 loans with a total disbursement of more than Rs 100 crore.