KreditBee funding

KreditBee , a Fintech lending startup, has raised $70 million (Rs 507 crore) in the second part of its Series C funding round co-led by TPG-backed NewQuest Capital Partners and Motilal Oswal Private Equity, through holding entity Finnov.

The transaction is a follow-on funding round from the one in February when Finnov raised $75 million from Azim Premji’s PremjiInvest, Mirae Asset Ventures, Alpine Capital, and Arkam Ventures.

With the closing of the second tranche, KreditBee’s complete funding from the round has gone up to $145 million, making it one of the largest funding rounds for an Indian lending startup since the beginning of the Covid-19 pandemic.

According to a source, the mix of primary and secondary transactions witnessed all early-stage Chinese investors, such as smartphone maker Xiaomi Corp., Shunwei Capital, and Kunlun, making a complete exit. These investors jointly held around 40% stake in the startup prior to the round.

The recently acquired capital will be utilized to boost its lending portfolio past unsecured personal loans. The lender is contemplating forays into secured lending and other auxiliary services such as insurance and card-based lending to individuals and small businesses.

In a statement, Madhusudan E, chief executive officer of Finnov said, “A complex demography like India requires simple, effective, and impactful lending solutions; that comes with a deeper understanding of the consumer financing needs of the ecosystem.”

Finnov, registered in March 2016, also holds Krazybee, a non-banking financial company (NBFC). The group established KreditBee in May 2018 focusing on full-stack digital lending for young professionals.

The platform specializes in personal loans and consumer durables loans up to Rs 2 lakh with tenures ranging from two months to 15 months. It competes with startups such as MoneyTap, EarlySalary, and Flipkart co-founder Sachin Bansal’s Navi.

In its earlier rounds, the company raised $8 million from Shunwei and Xiaomi in 2017. It also raised $43 million in equity from ICICI Bank and Arkam Ventures in its Series B round.

Amit Gupta, founding partner at NewQuest Capital Partners said, “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.”

According to Vishal Tulsyan, CEO at Motilal Oswal Private Equity, the decision to invest in the startup was based on its sound unit economics and scalable model. “With the sustained focus and momentum, we see the platform becoming a mainstream fintech lending solution in the Asian market.”

The company presently has over 1,200 employees and a user base of over 20 million, it said. The platform intends to diversify its product offering by advancing into digitally-enabled secured loans and insurance. It now intends to expand its base, targeting India’s over 180 million new-to-credit customers, according to Madhusudan.

The development comes at a time when the border standoff between India and China and alleged malpractices by numerous short-tenure loan apps in this segment have led to an elimination by Indian regulators on money lending apps backed by Chinese investors.

Google has recently taken down over 150 loan apps from its Play Store on the instruction of the Ministry of Information and Broadcasting and the Reserve Bank of India.