SIDBI-backed private equity fund India SME Investments has expanded its portfolio in the banking, financial services and insurance (BFSI) segment with a 60 crore investment in equity and debt in its portfolio company KreditBee. The investment in the online personal loan lending market is a follow-up tranche of investments from the fund which had placed Rs 28.4 crores in debt in Krazybee Services in September 2019. The company is a RBI-backed non-deposit-taking systematically significant non-banking financial company (NBFC-ND-SI) and part of KreditBee’s holding company.
The financing followed an investment of approximately Rs 507 crore that KreditBee raised in March this year from Premji Invest, TPG-backed NewQuest Capital Partners, Motilal Oswal Private Equity, Mirae Asset Ventures and Alpine Capital. KreditBee wants to expand its loan portfolio by introducing financial services such as Buy-Now-Pay-Later (BNPL), insurance, etc. The total capital raised by the company was just over Rs 1,100 crore with the latest round. According to India SME Investments, KreditBee has scaled its business by more than 5x thanks to seasoned credit analysis, optimal control over CAC and careful product selection.
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India SME Investments is registered as a category II alternative investment fund with the Securities and Exchange Board of India. It supports high-growth companies primarily located in 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 jewelry brand Kushal’s and snack company Priniti are part of its portfolio.
The transaction value in the consumer market lending segment in India is likely to reach $52.8 million in 2021 and is expected to grow at an annualized rate of 3.15 percent in 2021-25, leading to an estimated total of $59.7 million by 2025, according to Statista. Also, the average transaction value per user in the market lending segment (consumers) is expected to be worth $1,547 by 2021. In total, the transaction value of the alternative lending market is estimated at $115.7 million in 2021 and growing at a 3.22 percent CAGR to $131.3 million by 2025. The largest segment is crowdlending for businesses with a probable total transaction value of $62 .9 million this year.