CredAvenue, a Chennai-based FinTech Startup, became the 11th company to join the unicorn club in FY 2022 by raising $227 million over two rounds. The most recent being Series B funding, which was completed on 6th March 2022, increasing the company’s net worth to $1.3 billion.
This is the fastest rise witnessed by a FinTech Startup within 18 months of its inception. The valuations of CredAvenue nearly skyrocketed to 3x from its $410 million worth in September 2021.
Cred Avenue has built a robust structure with the most comprehensive technology stack that enables businesses to complete the debt cycle from disbursal to collections. It acts as a one-stop solution for the debt market.
From giving term loans and working capital solutions to acting as an origination platform for banks and non-banking financial institutions.
With bond issuance, it has created a bond platform to aid institutional and retail participants and also provides trade financing, 360-degree securitization, and portfolio buyouts.
About CredAvenue
As compared to the developed countries, India’s debt markets are still in their nascent stage. The debt market has not flourished the way it should due to underlying factors which are crippling the debt ecosystem with lack of infrastructure, lack of transparency, and inefficient price discovery.
CredAvenue tries to take the bull by its horns to make the debt market more inclusive and efficient. Thus, CredAvenue was founded to provide an opportunity for the debt market to expand by leveraging technology.
The former is a multi-platform/product approach, and the latter is a life-cycle engagement approach in the debt journey.
CredAvenue aims to create a marketplace where lenders/debt investors and borrowers with varying preferences, rules, and criteria can match their requirements using advanced analytics and proprietary models, resulting in an optimal match and market depth.
About Founder @ CredAvenue
Gaurav Kumar, the founder, and CEO of CredAvenue felt the deep need to balance the underdeveloped debt market in India and founded CredAvenue in 2017.
This is his fourth start-up and he has worked in the lending space for 16 years. The initial years of his illustrious career started as Chief Business Officer of Northern Arc Capital.
Business Model of CredAvenue
The epic journey of CredAvenue provides a platform to cater to the borrower and the debt investors with multiple solutions. It operates in the B2B model providing CredLoan – a term loan and working capital offered to the enterprises; Plutus – the bond platform enabling the issuance of a bond for institutions and retail investors.
CredCoLend – the co-lending platform for Banks and Non-Banking Financial Companies; the trade financing platform CredSCF and for an end-to-end securitization and portfolio buyout the platform CredPool plays a vital role.
Being a pit stop with all possible solutions it also offers portfolio management services such as Software as a Service (SaaS) to debt investors and lenders.
At present, the company’s client base stands at a prolific figure of more than 2,300 corporate and 750 lenders, and with the recent acquisition, the number is growing.
Funding and Utilizations of Capital
To envision its growth in the debt market the company raised funds in two rounds. In the Series A funding round on 29th September 2021, it raised $90 million led by Sequoia Capital India and co-led by TVS Capital Funds, Lightspeed India Partners, and Light rock, and in the Series B funding round on 06th March 2022, it raised $137 million led by Insight Partners, B Capital Group, Dragoneer Investment Group.
Part of the capital raised by the company is to be utilized in deep technology innovations, AI, ML, and data analytics to build a robust collection infrastructure.
The company has also utilized the freshly raised funds to acquire SPOCTO on 14th February 2022, a startup that already had global footprints and plans to grow its presence beyond the Middle East and India thus growing both organically and inorganically.
Future Milestones @ CredAvenue
To build a rock-solid foundation with its collection infrastructure by the fiscal year 2023 the company focuses to hire a talented tech team to its pool to strengthen its infrastructure by providing cutting-edge technologies in AI, ML, and data science.
The company’s immediate focus is to deepen its impact on the debt market in India and build a marketplace with more APIs for the debt investors/lenders and borrowers to enable seamless transactions, thus making better credit decisions.
There is an innate demand for products from overseas, and owing to their universal nature, the future looks bright for such demands.
To Conclude
The underdeveloped debt market of India is much lower than the average global GDP. After the second wave of the pandemic, the SMEs were unable to emerge out of the crisis due to irregularity of cash flow where clients were not paying up.
Despite the obvious demand, the market failed to grow in this segment due to a lack of proper infrastructure.
As rightly said by the founder and CEO Gaurav Kumar of CredAvenue that – “A two-sided marketplace has to be present” and to solve this crisis, the epic journey of CredAvenue has begun.
