CredAvenue turns into a Billion Dollar Unicorn

If you thought that most investors would have lost their appetite for Indian digital plays after the listing fiasco of the last 4 months, then think again. There is still appetite and there are still fintech names that are emerging as Unicorns. Incidentally, unicorn is the name given to start-ups that attain $1 billion in valuation or approximately Rs.7,700 crore in market capitalization. The latest to enter the exclusive Unicorn club is CredAvenue.

For starters, CredAvenue can be understood as a fintech debt marketplace which brings lenders and borrowers under a single agnostic platform. In its latest round of funding CredAvenue raised $137 million in a round that was led by Insight Partners and Dragoneer; even as existing investors also participated. This latest fund raising assigns an indicative valuation of $1.3 billion for CredAvenue, which is appreciable in these tough conditions.

CredAvenue has a family of products which are B2C products and also B2B products. Here are some classic instances. CredLoan offers term lending and working capital solutions for companies. CredCoLend facilitates co-lending partnerships between banks and NBFCs. Plutus is bond issuance platform for institutions and retail customers. Finally, while CredSCF offers trade financing solutions and CredPool offers total securitization solutions.

Cred Avenue has already onboarded more than 2,300 corporates and over 750 lenders on its agnostic platform. According to Cred Avenue, it has facilitated debt volumes to the tune of Rs.90,000 crore till date. However, what CredAvenue is betting on is the massive expansion of the bond markets in the same way as the equity markets took off in the 1990s. Indian debt markets will have to play a big role for the massive infrastructure funding plans.

CredAvenue want to use the recently raised $137 million for aggressively expanding through organic and inorganic means. It will also look to acquire diverse companies for forward and backward services and products integration with its core model. CredAvenue has recently added a digital collection offering with the acquisition of Spocto. CredAvenue will also allocate a part of the funds raised for improving its technological capabilities.

In September last year, Cred Avenue has raised nearly $90 million as part of its Series-A fundraising from marquee private equity names like Sequoia Capital, Lightspeed Ventures and TVS Capital. The big macro bet at this point of time is that Debt at $1.9 trillion market is just about 60% of GDP, which his much lower than the global peer group standards. Therein lies the opportunity that CredAvenue is looking to tap in India.