KreditBee, a fintech lender backed by Premji Invest and ICICI Bank, is engaging in discussions with private credit funds for a new funding round. This strategic move aims to bolster its valuation in preparation for its anticipated entry into the IPO market next fiscal year.
With a current valuation of $700 million, KreditBee raised over $200 million in March from its existing investors, including Advent International, Mitsubishi UFJ Financial Group (MUFG) Bank, Premji Invest, Motilal Oswal Alternates, NewQuest Capital Partners, and Mirae Asset Ventures. The non-bank financing company has accumulated more than $400 million in funding so far.
The company’s leadership team, consisting of co-founder and CEO Madhusudan Ekambaram, co-founder and CTO Karthikeyan Krishnaswamy, and co-founder and CFO Vivek Veda, plans one final private funding round before transitioning to an IPO. This private round is expected to take place within the next year, after which KreditBee will monitor market conditions to determine the optimal time for listing. If the current conditions remain stable, the IPO could occur in approximately one and a half years.
KreditBee is projecting robust growth for the current fiscal year, with an expected increase of 25-30%. The company’s personal loans segment, which is its oldest product, continues to perform strongly. Additionally, KreditBee aims to develop its business loan and loan against property segments during this period.
In light of recent concerns raised by the Reserve Bank of India (RBI) regarding unchecked growth in the unsecured lending sector, KreditBee is adopting a cautious growth strategy. The RBI’s Financial Stability Report highlighted risks associated with consumer loans, particularly personal loans, where many borrowers are managing multiple loans simultaneously. High delinquency rates are especially prevalent among borrowers with personal loans below ₹50,000.
The regulatory measures implemented, such as increased risk weights, have already tempered growth within the industry. Lower-rated non-banking financial companies (NBFCs) are experiencing capital constraints, while highly rated NBFCs like KreditBee, which benefit from strong capital adequacy and low leverage, are facing a modest increase in funding costs.
KreditBee’s loan portfolio is heavily focused on personal loans, with over 90% of its loans having an average tenure of 12 months.