CredAvenue raises $90 million in India’s biggest Series A funding round : Tech News

Mumbai: CredAvenue, an enterprise debt marketplace, has raised $90 million in a Series A funding round led by Sequoia Capital that also included Lightspeed, TVS Capital Funds and Lightrock India. This is the largest ever Series A round in India and ascribes the year-old fintech startup a valuation of $410 million.

The firm also counts credit card management startup Cred and Stride Ventures as investors. The new funds will be used to expand its product suite and ramp up its technology and data science infrastructure, founder and chief executive Gaurav Kumar told ET.

“The capital will go for building our product out as we envisage it; we’re not even a percent of where we want to be. It’ll be used for enhancing technology, data analytics, product, and platform capabilities,” said Kumar.

CredAvenue operates a platform that connects corporates seeking loans with financial institutions and other investors who can facilitate such debt offerings through various instruments. CredAvenue is not a non-banking financial company (NBFC), which means that the firm doesn’t lend on its own book, and merely facilitates these transactions for entities on its platform.

“We’re an operating system for India’s debt capital market. We work with enterprises with AAA ratings and unrated businesses. The size of debt facilitated on our marketplace ranges from Rs 50 crore to Rs 3,000-4,000 crore,” Kumar said, adding that this is a first-of-its-kind enterprise in India.

The Chennai-based firm currently has over 1,500 corporates and more than 750 lenders facilitating loans worth over Rs 72,000 crore, he said. It now aims to scale this by two times over the next year and plans to onboard more corporates and lenders. The startup currently facilitates six kinds of loan transactions: large working capital term loans, loan originations, corporate bonds, securitisation, co-lending and trade financing.

Record-breaking round

CredAvenue’s latest fundraise is the largest Series A round yet in India’s startup ecosystem, ahead of Ola Electric’s $58 million in 2019 and
Mensa Brands’ $50 million in May 2021, according to data from Venture Intelligence. Other Indian startups with large Series A rounds include
FamPay ($38 million in June 2021), Design Café ($29 million in December 2018) and
Cred ($25 million in September 2018), the data showed.

Avendus Capital was the advisor to CredAvenue for this transaction.

“The valuation is extremely attractive for us; in my knowledge it’s the highest-valued Series A. The reason why we went ahead has to do with the choice of partners. More than valuation, for the long term, these are partners we wanted to work with,” Kumar said. “We are mission-focused as a team. If we get this right, it’ll be transformational for the ecosystem and the country.”

According to
Sakshi Chopra, managing director at Sequoia India, the range of offerings and corporates on CredAvenue can help deepen India’s debt market.

“CredAvenue is a unique solution that not only simplifies access to credit for borrowers ranging from a BB to AA rating but also improves access to multiple debt products like bonds, supply chain financing, etc. on a single, unified platform,” Chopra said. “We believe it has the opportunity to become the platform of choice for borrowers and lenders operating in the debt market.”