True Balance, a financial services application developed by a South Korean startup of the same name, provides services to a large user base across smaller cities and towns in India. The company announced on Wednesday that it has secured $28 million in a recent funding round and anticipates achieving profitability in the coming year.

The Series D financing round included investments from SoftBank Ventures Asia, Naver, BonAngels, Daesung Private Equity, and Shinhan Capital. Since its founding five years ago, the startup, with offices in Seoul and Gurgaon, has accumulated approximately $90 million in funding.

Initially launched as a simple application for checking mobile balance or adding credit to prepaid mobile accounts, True Balance has expanded its offerings to encompass a variety of financial services. These now include online lending and utility bill payment options, with online lending currently serving as its primary focus.

In a recent interview with TechCrunch, Charlie Lee, founder and CEO of True Balance, stated that the company has distributed over $13.5 million in small loans to more than 6.7 million customers. These loans range in value from $6.75 to $675, according to Lee.

Many of its customers lack a traditional credit history, creating challenges in obtaining loans from conventional financial institutions like banks. Lee explained that True Balance, previously known as Balancehero India, utilizes alternative data sources to assess a user’s creditworthiness.

A significant portion of the Indian population currently lacks a credit score, which limits their access to various banking services. Numerous startups in India and Southeast Asia are exploring the use of alternative data – such as mobile phone details and transaction history – to evaluate the creditworthiness of these individuals.

Lee did not disclose the loan repayment rate but indicated it is sufficiently high that the company is considering collaborations with other organizations interested in leveraging alternative data, particularly those lacking the necessary technological infrastructure.

The company previously informed TechCrunch last year that it was approaching profitability, a goal it now expects to realize by the second quarter of next year. Lee also noted that the coronavirus pandemic negatively impacted True Balance’s business, as it did the broader financial services industry.

Analysts at Goldman Sachs reported earlier this month that the payments sector in India has not yet fully recovered from the pandemic’s effects and may not become consistently profitable for at least three more years.

“Prior to the coronavirus outbreak, our business was experiencing rapid growth,” Lee stated. “However, the pandemic and the loan moratorium implemented by the central bank presented challenges. We used this period to refine our collection processes and enhance other aspects of our operations.”

Over the past three months, True Balance has resumed growth, with Lee reporting a 300% increase. The startup continues to offer additional services, such as train ticket booking and e-commerce, and is also developing insurance products.

“Our focus remains on serving individuals who are not currently engaged with online payment systems, those without a credit score, and those who require assistance in accessing financial services,” he said.

The newly acquired capital will be used to reach the break-even point and then achieve profitability, Lee explained. True Balance is also dedicated to expanding its reach to more underbanked individuals throughout India.