Companies
OkCredit is looking for a buyer
Summary
- OkCredit is currently valued at $40-50 million, sharply lower than the $83 million it had raised from investors
Tiger Global-backed Psi Phi Global Solutions Pvt. Ltd, which owns the OkCredit brand, has been put on the block after an unsuccessful bid at raising fresh capital, said three people with knowledge of the company’s plans.
The kirana tech startup has appointed financial services firm InCred to look for a buyer, said the people cited above requesting anonymity. OkCredit is currently valued at $40-50 million, sharply lower than the $83 million it had raised in total from investors over three funding rounds, they said.
“The sale talks come on the back of a failed fundraising attempt by the company," said one of the people cited above. OkCredit planned to raise $40 million in the new round, the person added.
OkCredit raised $67 million in September 2019 in a Series B round of funding led by Tiger Global and Lightspeed. The same year, it raised $15.5 million in a Series A round from Tiger Global and other investors. Prior to that, it had raised seed money from Lightspeed in 2018.
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OkCredit’s valuation in the 2019 round could not be ascertained.
“The company has approached a few strategic investors. However, with OkCredit not having monetized its business much, it’s a difficult asset to sell," said the second person cited above.
The person said Rupifi, a digital business-to-business (B2B) platform offering loans, working capital, and payment services to small businesses, had engaged in talks with OkCredit but a deal could not be reached.
Emailed queries to spokespeople at OkCredit and Rupifi did not elicit any response.
Started in 2017 by Gaurav Kumar, Aditya Prasad and Harsh Pokharna, the firm connects small business owners, suppliers and customers, and enables them to record credit and payment transactions.
Earlier this year, VCCircle reported that the company had halved its workforce from 150 employees and was trying to realign its business model towards fintech initiatives. Its income was at ₹5.8 crore in FY21 and net sales was almost nil, according to VCCEdge, the data intelligence platform of VCCircle. Its earnings before interest, taxes, depreciation and amortization losses narrowed to ₹107 crore in FY21 from ₹155.7 crore in FY20.
Another report in April by news portal Entrackr said the company has decided to shut its e-commerce enablement platform, OkShop.
Kirana tech startups such as Khatabook and OkCredit have been struggling to grow and monetize their businesses. These firms have tried to grow from offering just digital bookkeeping services and layered it with credit to gain margins and traction among the wider kirana store network.
Meanwhile, India’s broader fintech industry is estimated to grow tenfold by 2030 to achieve an assets under management (AUM) of $1 trillion and revenues of $200 billion, according to a report published earlier this month by venture capital firm Chiratae Ventures and consultancy firm EY.
The report showed that funding in the fintech sector surged to $7.8 billion in 2021 from $2.9 billion in the previous year. The payments segment attracted the most funding at 44% of the total amount, followed by lending (16%). The rest was distributed among wealthtech, insurtech , neobanking, and blockchain and crypto.
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