CredAvenue gets USD 90 mn from Sequoia Capital India, Lightspeed, others

Debt platform CredAvenue on Wednesday said it has raised USD 90 million (about Rs 667.4 crore) in the first funding round led by Sequoia Capital India. The Series A round also saw participation from Lightspeed, TVS Capital Funds, Lightrock and others.

“The funding values the company at approximately USD 410 million, which is amongst the highest in India for a Series A funding round,” CredAvenue founder and CEO Gaurav Kumar told PTI. The funds will be utilised towards expanding product capabilities and ramping up the platform’s technology and data science infrastructure. The company aims to invest heavily in data science, machine learning and artificial intelligence over the next few months to significantly improve and expand its product offerings, across each of its sub-platforms.

Also read: Britannia ties up with Accenture to accelerate its digital transformation

CredAvenue is an enterprise debt marketplace that connects enterprises with lenders and investors. It has a portfolio of five platforms – CredLoan (Loan Platform), CredCoLend (Origination platform), Plutus (Bond Platform), CredSCF (Supply Chain Platform) and CredPool (Pool Platform).

To date, CredAvenue has facilitated transactions worth about USD 9 billion through the platform, while engaging with over 1,500 institutional borrowers and more than 750 investors, touching more than one million end-retail borrowers. “…the platform has crossed a cumulative GTV of USD 9.5 billion and is expected to close the current fiscal at more than USD 20 billion. This growth will be driven by the augmented borrower and lender acquisition as well as improved platform capabilities,” he said.

Kumar said based on the performance in the first half of the year, the company is “tracking USD 22 million of revenue for the current year”. “CredAvenue has one of the best unit economics amongst marketplaces. Currently, we are in an investment mode where we are adding to our people and technological capabilities. This is expected to provide us with significant operating leverage and profitability from FY24,” he added.

Kumar said CredAvenue will invest in data science, machine learning and artificial intelligence over the next few months to significantly improve and expand on its product offerings, across its platforms. The platform will transform from assisted platform to a completely self-serve, improving the speed and autonomy of the platform users, he added. CredAvenue has over 350 employees and expects to double its headcount to 700 by the end of FY22. The company also plans on global expansion and inorganic growth through strategic acquisitions.

“We have been on a hyper-growth trajectory since inception. The team has grown significantly despite the pandemic with over 150 people joining us in the last 12 months. We are making massive investments in ramping up our new office in Bangalore, which will primarily act as a centre for our technology team,” he said. Kumar added that Bengaluru is the next priority centre for the company given that it is a big source of talent in new-age technologies such as data science, core data engineering and machine learning.

The Bengaluru office alone has the potential to grow into a 200 250-member team in the next 12-18 months, he noted. On acquisitions, Kumar said CredAvenue will be looking to add specific technology capabilities, which will enhance user experience, and enable better credit and deal discovery and execution capabilities on the platform. “We are still in the preliminary evaluation phase and will be significantly choosy in selecting the right strategic and cultural fit for inorganic growth,” he added.

Asked about foraying into overseas markets, Kumar said given the way the platform is designed to operate in a plug-and-play and fully portable manner, CredAvenue plans to take it to offshore markets, starting with South-East Asia. “While we will continue to consolidate domestically, offshore expansion is almost a certainty a year or so down the line. Our choice of markets to be addressed will be the ones that face similar problems that we are looking to solve in the Indian market,” he stated.

Kumar added that the company may also choose to take only one of the sub-platforms to specific geography if the relevance is significant only for the specific offering. Avendus Capital was the exclusive financial advisor to CredAvenue on the transaction.