KreditBee raises $120 million funding in new tranche from Advent International, others

ET had first reported in September that Advent International was in talks to pick a stake in KreditBee.

In December, the Bengaluru-based startup had said it raised $80 million from existing investors Premji Invest, Motilal Oswal Alternates, TPG-backed NewQuest Capital Partners, and Mirae Asset Ventures. Post this round, the company will be valued at around $680 million, a person aware of the matter said. KreditBee did not comment on its valuation.

This makes it one of the largest funding rounds for an India startup in the last few months amid the ongoing funding crunch. KreditBee’s latest funding comes after fintech startup
MoneyView said on December 26 that had raised $75 million led by Apis Partners. ET first
reported about MoneyView’s new round on October 27.

These funding rounds have closed at a time when digital lending startups have come under intense scrutiny from the Reserve Bank of India (RBI), which introduced a
new set of rules to regulate online credit. This has put pressure on new-age lending businesses to actively focus on their non-bank units and capitalise them to meet the central bank’s preference for regulated entities.

In a statement, KreditBee said it will use the new capital to scale existing business and diversify its product offering by venturing into digitally enabled financial products. Started in 2018, the digital lender operates through its non-banking financial institution, KrazyBee, apart from partnerships with over 10 other financial institutions.

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The company is set to surpass $1 billion in assets under management (AUM) over the next 6-9 months, the statement added.
“We are delighted to welcome a long-term financial and strategic partner in Advent. This reinforces the confidence in our profitable business model and the long-term sustainability of it. The latest round will help us to achieve our vision of serving over 400 million middle income population in the country,” Madhusudan Ekambaram, cofounder and CEO of KreditBee said.

The startup has 3.5 million active users, Ekambaram had told ET last month. With over 7 million loan customers so far, KreditBee provides personal loans of up to Rs 4 lakh to professionals.

“We believe KreditBee’s proprietary underwriting tech stack is one of the best in the industry and helps in its ability to identify and underwrite future prime customers at an early stage,” said Shweta Jalan, managing partner, Advent International. “We are thrilled about this partnership and to assist KreditBee to drive further value creation in its next phase of sustainable growth.”

KreditBee is also planning to use the new capital to diversify its product portfolio into small and medium enterprise (SME) lending as well as to provide motor and vehicle loans. It is planning to enter the SME lending space this year.

Advent International also invested $175 million in data analytics company Tredence, another homegrown startup,
as reported by ET on December 23.