Indian fintech CredAvenue turns unicorn with fresh $137 million funding

Debt marketplace CredAvenue, which helps businesses and enterprises secure debt from lenders, has become the fastest Indian fintech startup to join the unicorn club, it said on Sunday.

The two-year-old startup has raised a $137 million Series B financing round led by Insight Partners, B Capital Group and Dragoneer, it said. The round values CredAvenue, which was founded by Vivriti Capital co-founder Gaurav Kumar, at $1.3 billion, up from about about $410 million in September last year, it said.

The startup, which counts Sequoia Capital India, Lightspeed Venture Partners, TVS Capital, Lightrock, Vivriti Capital and Indian fintech CRED among its backers, has raised over $227 million to date.

Businesses face scores of challenges — including opacity about interest rates and market evaluation — when they need to raise debt.

“This is my fourth startup and I have spent over 16 years in the lending space,” said Kumar, in an interview with TechCrunch. “The deepening in the debt market is not happening.”

CredAvenue has built what it says is India’s most comprehensive technology stack to meet business’ complete debt cycle from disbursal to collections.

It operates platforms for giving term loans and working capital solutions to enterprises, origination platform for banks and non-banking financial institutions to partner for co-lending, and bond platform for helping institutional and retail participants for bond issuance. Additionally, it also offers trade financing and end-to-end securitisation and portfolio buyouts.

“If you’re an enterprise and prefer direct finance, you can come to our loan stack, bond stack and ABS stack. If you have an indirect financing needs, you can set yourself on the co-ending platform and bring your retail customers. Our customers are any enterprise with revenue of more than $1.3 million,” he said.

“Once a partner — whether it’s a bank on the lender side or a borrower — integrates with us on our operating system, you get access to everyone sitting on our network. At the core, our offering is about interoperability. We are paving the way for India’s debt market to realise its full potential, and we plan to soon being a leading player in the global debt markets with our unique and diversified product suites.”

It recently acquired a collection startup called Spocto, which has operations in three markets. But the startup broadly plans to continue to focus on India, Kumar said. “We have barely scratched the surface.”

CredAvenue has facilitated loans of over $10.5 billion to date, Kumar said. Over 2,300 corporates, 450 enterprises and 750 lenders are active on the platform, he said. The startup plans to deploy the fresh funds to expand its business in India and is also looking to acquire companies to inorganically fuel its growth.

“We are excited about CredAvenue’s value proposition of bringing investors and borrowers on a single-window ecosystem to discover, facilitate and track debt products. I have had the privilege of knowing Gaurav for several years, and it’s exciting to back the strong team that is digitising Indian debt markets. Debt in India is still under-penetrated as a % of GDP at ~60%. This creates a massive opportunity for a leading player like CredAvenue,” said Kabir Narang, Founding General Partner at B Capital Group, in a statement.

“At $1.9 trillion, the Indian debt market is still underserved. CredAvenue helps automate and increase efficiency across the value chain. This is reflected in the strong retention amongst borrowers and repeat deals with investors. We like their tech-first approach to solve this problem. Beyond the business, what is even more exciting is the mission and impact they are having by providing access to debt to unlock human potential.”