IANSFintech startup Cred on Tuesday said it has agreed to buy credit software provider CreditVidya in a mix of equity and cash deal.
It is subject to approvals from National Company Law Tribunal (NCLT).
Both firms declined to comment on the terms of the deal.
After the acquisition, CreditVidya will continue to operate independently and its more than 200 employees will get access to Cred’s employee stock ownership plan (Esop).
The acquisition comes at a time when the Indian online lending sector is headed for consolidation as the Reserve Bank of India’s (RBI) first set of digital-lending guidelines emphasise the role of regulated entities such as non-banks, while reducing lending-distribution platforms to mere direct-selling agents.
ET had on November 25 reported that digital payments major PhonePe was set to acquire buy-now-pay-later platform ZestMoney, marking a big consolidation move in the sector.
Founded in 2012, CreditVidya provides a loan underwriting platform that helps banks and non-bank financial companies (NBFC) assess credit better. Through application programming interface (API) integrations, the company also helps businesses embed customised credit products for their customers.
“Expanding access to credit is a key driver for financial progress. CreditVidya’s patented tech stack uncovers signals of trust among under-served cohorts. We look forward to supporting them in powering an inclusive credit ecosystem,” said Kunal Shah, founder of Cred.
Interestingly, while CreditVidya is focused on including first-time borrowers in the credit economy, Cred has largely focused on people with credit cards and high credit scores.
“We’ve invested in building category-defining products that bring financial services to credit under-served Indians through our partners, transforming how risk is assessed and trust measured to drive financial inclusion,” said Abhishek Agarwal, cofounder and chief executive of CreditVidya. “In our next phase of our growth, as we build brand and scale distribution, we are excited to learn from the Cred team.”
CreditVidya has raised roughly $10 million in total and counts the likes of Kalaari Capital, Matrix Partners and Bharat Innovation Fund among its investors.
Over the past two years, Cred has been focusing on ramping up its credit play. In September, it said it would pay $10 million to acquire a minority stake in peer-to-peer (P2P) non-banking financial company LiquiLoans. Last year, it enabled P2P lending for its users through the launch of Cred Mint in partnership with LiquiLoans.
Cred is a backer of debt marketplace CredAvenue as well. It also operates an active credit line for its customers with Cred Cash, launched in 2020 through partnerships with other lenders.
ET reported in November 2021 Shah of Cred had acquired the NBFC Parfait Finance & Investment through Newtap Technologies, an entity he floated personally.
Previously, Cred acquired corporate spend management platform Happay and liquor delivery app HipBar for its prepaid payment instrument (PPI) licence.
Earlier this year, the startup was also in the final stages of discussions to acquire investment platform Amazon and Sequoia-backed Smallcase in a share-swap deal. However, the talks didn’t fructify, multiple people told ET.
In June, this year, Cred raised Rs 617 crore (about $80 million) in the first tranche of its $140 million funding round, valuing the credit card-management fintech at around $6.4 billion.
It counts the likes of Tiger Global, Sofina Ventures, Alpha Wave Ventures, Dragoneer, Coatue Management, Insight Partners, DST Global as investors.
It is subject to approvals from National Company Law Tribunal (NCLT).
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After the acquisition, CreditVidya will continue to operate independently and its more than 200 employees will get access to Cred’s employee stock ownership plan (Esop).
The acquisition comes at a time when the Indian online lending sector is headed for consolidation as the Reserve Bank of India’s (RBI) first set of digital-lending guidelines emphasise the role of regulated entities such as non-banks, while reducing lending-distribution platforms to mere direct-selling agents.
ET had on November 25 reported that digital payments major PhonePe was set to acquire buy-now-pay-later platform ZestMoney, marking a big consolidation move in the sector.
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Founded in 2012, CreditVidya provides a loan underwriting platform that helps banks and non-bank financial companies (NBFC) assess credit better. Through application programming interface (API) integrations, the company also helps businesses embed customised credit products for their customers.
“Expanding access to credit is a key driver for financial progress. CreditVidya’s patented tech stack uncovers signals of trust among under-served cohorts. We look forward to supporting them in powering an inclusive credit ecosystem,” said Kunal Shah, founder of Cred.
Interestingly, while CreditVidya is focused on including first-time borrowers in the credit economy, Cred has largely focused on people with credit cards and high credit scores.
“We’ve invested in building category-defining products that bring financial services to credit under-served Indians through our partners, transforming how risk is assessed and trust measured to drive financial inclusion,” said Abhishek Agarwal, cofounder and chief executive of CreditVidya. “In our next phase of our growth, as we build brand and scale distribution, we are excited to learn from the Cred team.”
CreditVidya has raised roughly $10 million in total and counts the likes of Kalaari Capital, Matrix Partners and Bharat Innovation Fund among its investors.
Over the past two years, Cred has been focusing on ramping up its credit play. In September, it said it would pay $10 million to acquire a minority stake in peer-to-peer (P2P) non-banking financial company LiquiLoans. Last year, it enabled P2P lending for its users through the launch of Cred Mint in partnership with LiquiLoans.
Cred is a backer of debt marketplace CredAvenue as well. It also operates an active credit line for its customers with Cred Cash, launched in 2020 through partnerships with other lenders.
ET reported in November 2021 Shah of Cred had acquired the NBFC Parfait Finance & Investment through Newtap Technologies, an entity he floated personally.
Previously, Cred acquired corporate spend management platform Happay and liquor delivery app HipBar for its prepaid payment instrument (PPI) licence.
Earlier this year, the startup was also in the final stages of discussions to acquire investment platform Amazon and Sequoia-backed Smallcase in a share-swap deal. However, the talks didn’t fructify, multiple people told ET.
In June, this year, Cred raised Rs 617 crore (about $80 million) in the first tranche of its $140 million funding round, valuing the credit card-management fintech at around $6.4 billion.
It counts the likes of Tiger Global, Sofina Ventures, Alpha Wave Ventures, Dragoneer, Coatue Management, Insight Partners, DST Global as investors.
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