CRED to invest in LiquiLoans for minority stake

Credit card payment app and D2C discovery platform CRED is planning 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, both companies said in a joint statement. LiquiLoans, which is a non-banking financial company, has been enabling 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 technology 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 earlier 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, it backed Delhi-based fintech startup RevFin in a Rs 100 crore debt round.

While LiquiLoans is yet to file its financials for FY22, the company’s operating revenue shot up 5.3X to Rs 22.74 crore in FY21 from Rs 4.26 crore in FY20. As per its annual financial statements filed with RoC, the company also turned profitable and booked a profit of Rs 58 lakh in FY21 against a loss of Rs 60 lakh during FY20.

LiquiLoans also claims that it has built a profitable business since its inception, and created a trusted network of investors and borrowers with an NPA of less than 1%.

Over the past year, CRED has invested and acquired a clutch of startups to explore new avenues to make money. In October 2021, the Shah-led company acquired Chennai-based liquor purchase and delivery startup HipBar. Soon after that, it also acquired expense management startup Happay for about $180 million. It was reportedly in talks to acquire Times Internet-owned Dineout and Rainmatter-backed debt investment platform WintWealth. While Dineout eventually got acquired by foodtech giant Swiggy in a $200 million deal, Wintwealth denied the talks of acquisition with CRED.

As per media reports, CRED was also negotiating with wealth management startup Smallcase for a potential acquisition. However, the plan fell through as per The Morning Context report.

CRED, which entered the unicorn club in April 2021, raised $140 million in a Series F round at a $6.4 billion valuation. Entrackr had exclusively reported the development. Apart from its core credit card payments business, CRED runs D2C marketplace and allows utility bill payments feature among others.

For the fiscal year ending on March 31, 2021, CRED managed to grow its revenue from operations over 170X to Rs 88.6 crore. The company’s losses during the period also soared from Rs 361 crore to Rs 523 crore.