Temasek’s Fullerton to take control of Lendingkart in distressed acquisition

Lendingkart, a digital lending platform focused on small and medium enterprises (SMEs), announced that Fullerton Financial Holdings (FFH), a wholly owned subsidiary of Singapore’s Temasek, will acquire a controlling stake in the company.

According to the company, the transaction is pending regulatory approval. The investment will include a capital infusion of up to Rs 252 crore ($30 million), allowing Lendingkart to enhance its technology and expand its reach into underserved markets.

This acquisition by Fullerton Financial appears to be an extreme down round for Lendingkart, which was valued at around $690 million after raising a small equity tranche alongside $12 million in debt in June this year. Notably, the recent equity investment followed a gap of over four years for the Harshvardhan Lunia-led company, during which it primarily raised funds through multiple debt rounds.

To date, Lendingkart has raised Rs 1,050 crore ($126 million) in equity capital from investors such as Fullerton, Bertelsmann, Mayfield India, Saama Capital, Sistema Asia, and India Quotient.

On Thursday, an Economic Times report indicated that Lendingkart will be valued at $100 million following the capital infusion from Fullerton. Data from TheKredible shows that Temasek already controls approximately 38% of the company before this latest round.

“...This investment represents a vote of confidence in Lendingkart's ability to transform the MSME lending landscape. Our goal is to replicate FFH’s past successes in the Indian financial market," said Lunia.

Lendingkart, which disburses loans with an average ticket size of Rs 5 lakh to Rs 6 lakh to MSMEs, has disbursed over Rs 18,700 crore to more than 300,000 businesses across 4,100 cities, according to its website.

In FY23, Lendingkart performed well, with revenue from operations growing 33.4% to Rs 858 crore, while posting a profit of Rs 119 crore. The company has yet to file its financial results for FY24.

Last year, media reports indicated that Lendingkart is planning an initial public offering (IPO) by next year, with a goal of crossing Rs 10,000 crore in assets under management (AUM) before going public.