Lending platform Yubi valued at $1.5-billion in secondary sale by investors

Chennai-headquartered non-banking finance company Vivriti Capital currently owns just under 50% of Yubi.

A secondary sale is one where an existing shareholder liquidates part of his shareholding by selling some shares either in the open market or to promoters.

“In order to keep the operations of the platform and the NBFC separate, the process to restructure the two entities started almost a year back and now is about to get over,” one of the sources said on condition of anonymity as regulatory filings are yet to be done.

As per the recast process, Vivriti sold some part of its shareholding in Yubi to existing investors, valuing the company at $1.5 billion. This is at a premium to its last funding round where it raised $137 million at a valuation of around $1.2 billion. Insight Partners, Dragoneer Investment Group and B Capital Group led that round in 2022.

“Yubi has had some conversations with prospective investors for a primary fund infusion, and the valuation ask was north of $2 billion,” said another person in the know.

Discover the stories of your interest

However, the person added that nothing has been finalised yet. The company is focusing on revenue growth and profitability in the coming years,Chief executive officer Gaurav Kumar did not comment on the secondary tranche when contacted by ET.

A platform for both lenders and borrowers

Yubi is a composite debt platform where banks and NBFCs can plug in on one side. On the other side are corporations seeking debt, fintechs looking for co-lending partnerships and NBFCs looking to securitise their assets.

The company closed FY23 at a total gross merchandise value (GMV) of Rs 72,000 crore. GMV for Yubi is the total amount of loans facilitated by the platform.

In FY22 the company had generated a topline of around Rs 160 crore which doubled to around Rs 300 crore in the last financial year.

“We have grown 100% in terms of revenue year on year and we will close this year with another 100% growth,” said Kumar, responding to queries on the revenue growth. “We get paid by both the borrowers and the lenders, borrowers pay us on the take rates and lenders pay us on the AUM.”

Take rate is the commission charged by a platform for facilitation of a loan. AUM stands for assets under management, or loans that are deployed through Yubi. Currently, Yubi gets a commission of 46 basis points for each disbursal.

Yubi recently launched Yubi Credit Marketplace, which is an interoperable platform. Kumar explained that any lender who might start off with retail loans on the platform will move on to supply chain loans just through a few steps. Thus they will not be constrained by one-to-one integrations.

Shuffle at the top

Yubi has seen some shuffling at the top of late. Its senior vice president, corporate development, Sudha Rangarajan, moved out of the company recently.

Some other employees in the organisation have also left. Responding specifically to this, Kumar said every year around 4.5% to 7% of the employees are rated below the threshold, and they might well choose to move out of the company.

Yubi did not respond to queries around Rangarajan’s exit.

“We are one of the very few companies at this scale which is hiring and we believe that if you are building for the future this is the best time to hire, since we are getting people at around 35% lesser salaries than in the hiring boom last year,” Kumar said.

Yubi has added around 140 new people to the team in the last few months, and its overall strength has risen to 1,500 from around 1,300 last year, Kumar added. The company recently opened an office in Ahmedabad and is now present in Gurugram, Bengaluru, Delhi and Hyderabad.