Exclusive: KreditBee plans ‘Ghar Wapsi’ from Singapore to India

Fintech company KreditBee is shifting its domicile to India from Singapore, sources aware of the development told Entrackr. With this move, the firm will join a bunch of fintech companies which are in the process of shifting their base to India from Singapore or the US (mostly Delaware).

“Fintech companies including KreditBee want to be headquartered in India because the local ecosystem including public markets have matured in the past few years,” said one of the sources requesting anonymity. “Moreover, regulators tend to like fintech firms to be based out of the country as diligence and monitoring becomes easy.”

KreditBee is registered as Finnove Private Limited in Singapore which has an over  70% holding in the Indian entity of the lending firm.

According to sources, KreditBee has been working on a relocation plan for the past few months. “It’s seeking regulators' inputs and figuring out tax liabilities,” said another source who also wished not to be named.

Sources further added that another benefit such companies moving back to India hope to reap is from the rising valuations being offered by domestic public markets to technology firms.

KreditBee has declined to comment on the story.

Besides KreditBee, Pine Labs, Groww, Razorpay, Meesho and Zepto have been working on reverse flips. Walmart-owned PhonePe was the first to move its domicile to India and its investors paid a hefty Rs 8,000 crore in taxes to the government for this move.

The quantum of the tax depends on the company’s valuation and third-party audits.

KreditBee was valued at around $700 million during its latest tranche in March. It’s one of the few fintech companies that may turn unicorn in the next funding round. It has raised more than $400 million to date.

Sources emphasized that a reverse flip will also smoothen KreditBee’s road to IPO. While the company isn’t in a rush, its founder and CEO Madhusudan Ekambaram anticipates a public listing by 2027.

Six-year-old KreditBee facilitates loans up to Rs 4 lakh for a tenure of 2 to 15 months with an interest rate of up to 2.49%. As per the startup data intelligence platform TheKredible, Premji Invest is the largest external stakeholder with 23.44% followed by Newquest Asia and Alpine Capital.

KreditBee posted Rs 64.33 crore profit whereas its revenue from operations grew to Rs 788.66 crore in FY23. Even in the first half of FY24, the company claimed a profit after tax of Rs 95 crore and expected to close the last fiscal with Rs 250-260 crore profit.

The company majorly competes with MoneyTap, Fibe (formerly EarlySalary), LazyPay, and Sachin Bansal’s Navi, among others.

A return to India, while driven by policy and market compulsions, will not be as simple as it sounds, thanks to the heavy bill it comes with for back taxes effectively. That might necessitate funding support for KreditBee, dispute being profitable, creating its own issues of valuations and change in stake. Going for a debt raise might also be a touch and go affair, considering the relatively higher interest rates now.  Thus, figuring out the financials of the move will probably occupy a lot of mindspace for the firm now that it has decided to move. Investors will do well to hope and support any process that ensures a quicker resolution, to ensure the firm stays focused on its core business as well.