Bengaluru: Online credit platform KreditBee was an outlier in a year engulfed in a funding winter that saw a number of devaluations and capital infusions worth less than a fraction of the deals seen last year. The company raised $200 million in a Series D round at the turn of 2023, one of the only three digit deals made in India in 2023, which sent its valuation close to $700 billion.
As the business grows into various new verticals, KreditBee will be looking to raise more funds in a fresh round by the end of 2025, co-founder and chief executive officer Madhusudan Ekambaram told DH. “We can build our assets under management (AUM) for at least 12-14 months from here on. Somewhere at the end of the upcoming calendar year is when we have to go to the market to raise capital again, probably by Q3 or Q4 of FY25,” he said.
This could be followed by taking the company public 16-18 months after the next fundraise, Ekambaram added.
The company, which counts marquee investors PremjiInvest, Motilal Oswal, ICICI Bank and Advent International among its backers, is already in preparation for the IPO and will be evaluating itself as per listing standards for the pre-IPO round, as per the CEO.
“We will be pegging ourselves at a price to earnings number. So whatever our profit after tax (PAT) will be for the next financial year, our valuation will be a multiple of that. In a very bad market, you’d end up with a number that is 25x. In a good market, it could be 30-25x, and in a brilliant bull run, it could be upwards of 40x,” Ekambaram said.
In the first half of FY24, the company recorded a PAT of Rs 95 crore, which was equal to the full profit recorded in the previous financial year. The target is to close the financial year with a profit of close to Rs 250-260 crore, the co-founder said, adding that this number had already reached Rs 175 crore by the December quarter.
The Bengaluru-based startup has also been diversifying its loan portfolio by extending focus to small business loans to small and micro enterprises and a loan against property product, both of which are aimed at its existing customer base of salaried and self-employed people in tier II/III towns.
“We are doing roughly Rs 50 crore of disbursement in business loans, but my overall number is Rs 1,900 crore, so we have to scale up this number to make it a meaningful portion of our entire loan book,” he said.
One way KreditBee is doing this is by setting up physical stores as offline presence is required to offload credit related to business and property, as per Ekambaram. The company has already started expanding offline in Bengaluru and Chennai, and will mostly be focusing on locations in the south of India, including in states like Andhra Pradesh, Telangana and Maharashtra. “If there is a good M&A opportunity towards this particular segment, we might want to look into that as well so that it can give us an edge in offline expansion,” he explained.