IBEF: September 30, 2021
CredAvenue, a debt marketplace for businesses, has received US$ 90 million in a Series A round headed by Sequoia Capital, with participation from Lightspeed, TVS Capital Funds, and Lightrock India. This is India's largest ever Series A round, giving the year-old fintech startup a US$ 410 million valuation.
Cred, a credit card management business, and Stride Ventures are also investors in the company. The additional funds will be used to grow the company's product line as well as its technology and data science infrastructure, according to founder and CEO Mr. Gaurav Kumar.
“The funds will be used to develop our product as we see it; we're not even a quarter of the way there yet. It will be utilised to improve technology, data analytics, product, and platform capabilities.” Mr. Kumar stated.
CredAvenue is a platform that links businesses looking for loans with financial institutions and other investors that may help them with debt offers using a variety of mechanisms. CredAvenue is not a non-banking financial company (NBFC), which means it does not lend money and instead facilitates transactions for businesses on its platform.
“We're a debt capital market operating system in India. We deal with both AAA-rated companies and unrated companies. The debt facilitated on our marketplace goes from Rs. 50 crore (US$ 6.7 million) to Rs. 3,000-4,000 crore (US$ 404-538 million),” Mr. Kumar added, emphasising that this is India's first-of-its-kind venture.
According to him, the Chennai-based business now has over 1,500 corporate clients and over 750 lenders, enabling loans worth over Rs. 72,000 crore (US$ 9.7 billion). It now plans to increase this by twofold over the next year, as well as onboard more businesses and lenders. Large working capital term loans, loan originations, corporate bonds, securitization, co-lending, and trade finance are among the six types of loan transactions that the startup presently supports.
According to statistics from Venture Intelligence, CredAvenue's recent financing is the largest Series A round in India's startup ecosystem, surpassing Ola Electric's US$ 58 million in 2019 and Mensa Brands' US$ 50 million in May 2021. According to the statistics, other Indian businesses that have raised significant Series A funding include FamPay (US$ 38 million in June 2021), Design Café (US$29 million in December 2018), and Cred (US$ 25 million in September 2018).
CredAvenue was advised by Avendus Capital on this transaction.
“The price is quite appealing to us; it is, to my knowledge, the highest-valued Series A. The reason we moved ahead is due to the partners we chose. These are partners we wanted to work with in the long run, not just for the sake of valuation,” Kumar said. “As a group, we are mission-driven. It will be transformative for the ecology and the country if we do this right.”
The range of services and corporates on CredAvenue, according to Ms. Sakshi Chopra, managing director at Sequoia India, can assist develop India's loan market.
“CredAvenue is a one-of-a-kind solution that not only streamlines credit access for borrowers with credit ratings ranging from BB to AA, but also enhances access to diverse debt instruments such as bonds, supply chain finance, and more on a single, unified platform,” Ms. Chopra added. “We believe it has the potential to become the debt market's preferred platform for borrowers and lenders.”
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.