Exclusive: Rupeek raises fresh funds at 60% valuation cut

Online gold loan platform Rupeek has raised Rs 50 crore from 360 One Large Value Fund (formerly IIFL Wealth Management). Significantly, the company’s valuation nosedived by 60% in the new round.

The board at Rupeek has passed a board resolution to issue 1,307 compulsory convertible preference shares at an issue price of Rs 3,82,492 each to raise Rs 50 crore, its regulatory filing shows.

The company will use these funds for growth, expansion, and general corporate activities, as the company’s board decides.

During FY24, the company also raised around Rs 43 crore from existing investors such as Peak XV, Bertelsmann, Accel India, and GGV Investments, the filing further shows.

According to Fintrackr's estimates, the company has been valued at around Rs 2,050 crore or $250 million post-allotment. This implies that the company raised new money at a 60% haircut in its valuation as compared to Rupeek’s peak valuation of $634 million in January 2022.

Recently, an ET report said that Rupeek was in talks to raise funds from Ranjan Pai’ investment office Claypond Capital and Axis Bank at a valuation of $200-250 million.

Rupeek provides gold loan services and claims to streamline the entire processing from underwriting to disbursal in 30 minutes.

The Binny Bansal-backed company has raised around $150 million to date. As per startup data intelligence platform TheKredible, PeakXV is the largest external stakeholder followed by Accel and Bertelsmann. Its new investor 360 One Large Value Fund holds 2.44% (post-allotment).

The Bengaluru-based company is yet to report FY24 numbers but its revenue from operations declined 27.6% to Rs 89 crore in FY23 while the losses stood at Rs 281 crore in the fiscal year ending March 2023.

The Sumit Maniyar-led firm directly competes with Oro Money, Ruptok, Yellow Metal, and to some extent with PayU-backed Indiagold.

There should be no issues on the valuation haircut for Rupeek, considering that its peak valuation was not just at the peak of the funding cycle, but subsequent performance has also failed to justify those numbers. There are far too many founders who get hung up on a specific valuation number, before it is too late to raise fresh funding. 

Rupeek has clearly focused on the next steps, rather than dwell on the past too much. That it found backers at the new valuation figure also speaks about the credibility the founders retain, despite the tough times in the recent past.