Credit card payment app and discovery platform D2C CRED plans to invest $10 million in peer-to-peer lending platform LiquiLoans to acquire a minority stake in the Mumbai-based startup.
The investment will deepen the engagement between LiquiLoans and CRED, the two companies said in a joint statement. LiquiLoans, which is a non-bank financial company, enabled CRED members to participate in peer-to-peer lending opportunities through the CRED Mint product. The strategic partnership with CRED will also enable LiquiLoans to strengthen its technological capabilities.
The deal could value LiquiLoans at around $200 million, the companies said in a statement.
Founded by Gautam Adukia and Achal Mittal, LiquiLoans offers products such as personal loans, consumer loans and deposit financing. The startup has already received around $2 million from institutional and individual investors, including Matrix Partners and Kunal Shah, but has not raised any funds. since 2019. Earlier this year, he supported RevFin, a Delhi-based fintech start-up in a Debt of Rs 100 crore round.
While LiquiLoans has yet to file its financial statements for FY22, the company’s operating revenue increased 5.3 times to Rs 22.74 crore in FY21 from 4 Rs.26 crore in FY20. According to its annual financial statements filed with RoC, the company also turned profitable and recorded a profit of Rs 58 lakh in FY21 against a loss of Rs 60 lakh in FY20.
LiquiLoans also claims to have built a profitable business since its inception and created a trusted network of investors and borrowers with an NPA below 1%.
Over the past year, CRED has invested in and acquired a handful of startups to explore new avenues to earn money. In October 2021, the Shah-led company acquired HipBar, a Chennai-based alcohol buying and delivery startup. Shortly after, it also acquired expense management startup Happay for around $180 million. It would have been in talks to acquire WintWealth, owned by Times Internet, Dineout and Rainmatter, a debt investment platform. While Dineout finally got acquired by food tech giant Swiggy in a $200 million deal, Wintwealth refuse acquisition talks with CRED.
According to media reports, CRED was also negotiating with wealth management startup Smallcase for a possible acquisition. However, the plan failed according to The Morning Context report.
CRED, joined the unicorn club in April 2021, raised $140 million in a Series F round at a $6.4 billion valuation. Coach had exclusively reported Development. In addition to its core credit card payment business, CRED runs the D2C marketplace and enables utility bill payment functionality, among other things.
For the financial year ended March 31, 2021, CRED managed to grow its revenue from operations over 170X at Rs 88.6 crore. The company’s losses during the period also fell from Rs 361 crore to Rs 523 crore.