SIDBI-backed private equity fund India SME Investments has expanded its portfolio in the banking, financial services, and insurance (BFSI) segment with a Rs 60-crore equity and debt investment into its portfolio company KreditBee. The investment in the online lending marketplace for personal loans is a follow-up tranche of investment from the fund that had put Rs 28.4 crores in September 2019 as debt in Krazybee Services. The firm is an RBI-backed non-deposit taking systematically important non-banking financial company (NBFC-ND-SI) and part of the holding company of KreditBee.
The funding followed an investment of around Rs 507 crore raised by KreditBee in March this year from Premji Invest, TPG-backed NewQuest Capital Partners, Motilal Oswal Private Equity, Mirae Asset Ventures and Alpine Capital. KreditBee is looking to expand its lending portfolio by introducing financial services like Buy-Now-Pay-Later (BNPL), insurance, etc. The total capital raised by the company stood at a little over Rs 1,100 crore with the latest round. According to India SME Investments, KreditBee has scaled its business by over 5X on the back of seasoned credit analytics, optimal control on CAC, and prudent product selection.
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India SME Investments is registered as a category II alternative investment fund with Securities and Exchange Board of India. It backs early-growth companies primarily based or operating in Tier-II and Tier-III cities and targeting the lower or middle-class segment. Value retailer in Uttar Pradesh and Bihar Citykart, fashion jewellery brand Kushal’s, and snacking company Priniti are part of its portfolio.
The transaction value in the marketplace lending for the consumer segment in India is likely to reach $52.8 million in 2021 and is expected to grow at an annual growth rate of 3.15 per cent during 2021-25 leading to a projected total amount of $59.7 million by 2025, according to Statista. Also, the average transaction value per user in the marketplace lending (consumer) segment is expected to be worth $1,547 in 2021. Overall, the alternative lending market’s transaction value is estimated to be $115.7 million in 2021 and grow at 3.22 per cent CAGR to $131.3 million by 2025. The largest segment is crowdlending for businesses with a likely total transaction value of $62.9 million this year.