Exclusive: OkCredit in advanced talks to raise $60 Mn led by Tiger Global

Update: Hours after Entrackr report, OKCredit and its investors confirmed $67 million Series B round to press.

Previous report: The urge to digitalise traditional bahi-khata, payments management and other financial activities have increased substantially in the past three-four years. Besides the penetration of the Internet and smartphones, push from the government to embrace technology has been playing the role of catalyst to digital movement in India.

The urge for going digital by 50 million SMEs and small scale merchants has triggered a multi-hundred opportunity for startups and early to growth-stage investors. 

OkCredit, KhataBook and Vypaar are some notable startups who already got backing from the likes of Tiger Global, Lightspeed and Sequoia. Doubling down their stakes in OkCredit, existing investors are leading Series B round. 

According to four Entrackr sources, OkCredit is raising up to $60 million Series B round. “Tiger Global and Lightspeed will be co-leading the round while Morningside and Venture Highway will also participate in the fresh financing round,” said three of the four sources aware with the details of the deal. They requested anonymity.

Sources outline that the conversation between OkCredit and investors are in an advanced stage. If the deal fructifies, the Series B round will come within six months of its previous round. The Bengaluru-based firm had raised $15 million Series A round in June this year.

“A couple of fresh investors are likely to join the fresh round. The firm has been engaged with several new backers. However, nothing has finalised on the participation of such investors,” added above-quoted sources. 

Entrackr couldn’t ascertain the name of the two fresh investors who may participate.

Meanwhile, the company had received an infusion of Rs 35.44 crore from its Delaware-based holding entity - OkTech Inc. According to RoC filings with MCA, the company received the money early this week. 

Last month, OkCredit had claimed to have 5 million active users (aka merchants) across 2,000 cities. Its clientele base includes paan shops, kirana, medical, restaurants and laundry among many other verticals.  

Curiously, the holding entity has valued OkCredit about Rs 1,714 crore in the fresh infusion. While the parent entity can value holding companies technically whatever they wish, it’s not standard practice to have such high valuation. 

Since we don’t know the valuation of the early-stage venture, it could be real as well. If that’s the case, OkCredit will be one of the largest valued startups in B2B fintech space in the past few years.

Sources assert that OkCredit will likely to be valued in the range of $150 to 180 million in the Series B round. Entrackr queries sent to OkCredit, Tiger Global, Lightspeed and Morningside didn't receive a response until publication of this post. 

We will include their responses as and when they respond.

OkCredit directly competes with KhataBook and a few others. KhataBook already had raised $4 million from Sequoia Capital, Y Combinator and Info Edge. According to an ET report, the company, which was also a part of Sequoia’s Surge accelerator programme first cohort, is in discussion with DST Partners Fund, Ribbit Capital and 20 well know angels to raise $20 million Series A round.