Fintech startup KreditBee raises $70 mn from TPG arm, Motilal Oswal

KreditBee gives out an average credit of Rs 12,000 to self employed users and Rs 25,000 to salaried people

Fintech lending platform KreditBee’s holding entity, Finnov, has raised an additional $70 million in a follow-on Series C round from TPG-backed NewQuest Capital Partners and Motilal Oswal Private Equity. The conclusion of this round has led to an exit of most of the early-stage investors including Xiaomi, Shunwei and Kunlun Capital. The holding entity had very recently raised $75 million from marquee investors Premji Invest, Mirae Asset Ventures, Alpine Capital and Arkam Ventures. With this round, the Bengaluru-based startup has so far raised approximately $200 million. 

The fresh funds would be used to increase the equity base on the balance sheet of the company to further leverage debt capital to increase its loan book and explore new areas such as mutual funds-backed finance, gold finance and vehicle finance on a pilot basis.

“While concentrating on the salaried and self employed user base, we will be looking at new-to-credit people who are around 200 million of the population. We have captured only 15 per cent of such customers so far,” said Madhusudan E, co-founder & CEO of KreditBee’s holding group entity.

It gives out an average credit of Rs 12,000 to self employed users and Rs 25,000 to salaried people. 

While the number of registered users is 30 million, the  company has an active user base of 5 million people currently. It had been growing at a 100 per cent growth rate month-on-month since 2018 until the pandemic hit. The demand went down by 50 per cent in FY21 as compared to FY20 and is likely to reach the pre-pandemic level by June this year. The number of defaulters has also gone up to 7 per cent as compared t pre-Covid level of 3.5 per cent.

“In a credit lending business, if you think about how to collect the amount after you have given out then you have got the model wrong. More than 85 per cent of our users pay back on the due date, the rest 10-11 per cent comes in the next 90 days,” said Madhusudan E.

“The requirements of the average value-seeking middle class Indian can only be met by a multitude of lending products. One size doesn’t fit all. We are excited to become a shareholder of Finnov at this juncture and to support its next stage of development in offering innovative lending solutions to the dynamic India market”, said Amit Gupta, Founding Partner at NewQuest Capital Partners.