Chennai-based CredAvenue announced on March 6 that it has secured $137 million in a Series B round of funding, valuing the online debt marketplace at $1.3 billion, within 18 months of its inception, making it the fastest fintech startup in the country to enter the elite unicorn club.
CredAvenue, which makes it easier for businesses to access the debt market to raise capital and secure loans, as well as assisting banks and non-banking finance companies (NBFCs) lend and manage loans, has attracted investors in a debt-starved market like India. The company in a statement said that the investment was anchored by Insight Partners, B Capital Group, and Dragoneer, alongside participation from existing investors.
In the most recent round, Insight Partners invested around $75 million, while B Capital infused around $30 million. With this investment, Insight Partners will own 5.9 percent of the firm, while B Capital will own 2.3 percent on a fully diluted basis. Vivriti Capital, through its subsidiary Credvenue, will remain to be the largest shareholder with 50.5 percent shareholding, and Sequoia Capital coming in second at 7.79 percent.
CredAvenue was reported to be in talks with Insight Partners for its unicorn funding round, with additional investments from existing investors Sequoia and Lightspeed India. After Mamaearth, Dealshare, and Xpressbees, the company is the 11th startup in 2022 to enter the unicorn club.
CredAvenue, which was founded in 2020, serves as a marketplace that connects businesses with lenders and investors. It also enables businesses and lenders to gain access to both primary and secondary bonds. It plans to use the capital to grow its operations in India and other key global markets, as well as to strengthen its technological capabilities.
The company recently spent around $46-56 million to acquire Spocto Solutions, a Mumbai-based artificial intelligence, and machine learning-powered debt recovery platform. As a result of the acquisition, lenders on CredAvenue’s platform would now have access to underwriting and collection services on the same platform.
CredAvenue founder and CEO Gaurav Kumar in a statement said, “We are looking at building the Spocto franchise globally, the company is already present in the Middle East and we plan to take them to other markets.” While the startup will expand Spocto Solutions abroad, Kumar stated that CredAvenue’s global expansion ambitions will be put on hold. CredAvenue will continue to prioritize growth in the Indian market. The company plans to expand its expertise in the credit SaaS (software as a service) area, both in retail as well as in enterprise. It also sees potential in expanding the supply chain financing vertical, Kumar added.