OkCredit is looking for a buyer

• ByStartupStory     |    August 31, 2022

According to three people familiar with the company’s plans, Tiger Global-backed Psi Phi Global Solutions Pvt. Ltd., which owns the OkCredit brand, has been placed on the market after failing to acquire additional capital. According to the person identified above who requested anonymity, the Kirana IT company has contacted financial services firm InCred to locate a buyer. According to them, OkCredit is now valued at $40 to $50 million, much less than the $83 million it received from investors during three investment rounds.

“The sale talks follow the company’s failed financing attempt,” one of the people cited above said. According to the source, OkCredit intended to raise $40 million in the new round. In September 2019, Tiger Global and Lightspeed led a $67 million Series B round of funding for OkCredit. In the same year, it received $15.5 million in Series A capital from investors, “source,” including Tiger Global. Lightspeed had previously provided startup capital in 2018.

“A few strategic investors have been engaged by the company.” However, because OkCredit hasn’t monetized its business substantially, it’s a challenging asset to sell, “said the aforementioned source.” The source stated that Rupifi, a digital business-to-business (B2B) platform that provides loans, working capital, and cost suppliers to small businesses, had conversations with OkCredit but that a contract could not be made.

VCCircle reported earlier this year that the company had cut its workforce from 150 to 50, to refocus its business model on fintech operations. According to VCCEdge, VCCircle’s information intelligence platform, its revenue in FY21 was 5.8 crore rupees, with internet gross sales virtually nonexistent. In FY21, their profit before interest, taxes, depreciation, and amortization losses fell from 155.7 crores to 107 crores.

Kirana digital businesses like Khatabook and OkCredit have struggled to develop and earn a profit. These companies have made an effort to diversify from solely providing digital bookkeeping services and have introduced financing to boost margins and acquire traction among the greater Kirana store community. According to a report released earlier this month by venture capital firm Chiratae Ventures and consultancy firm EY, India’s whole fintech industry is expected to increase tenfold by 2030, reaching $1 trillion in assets under management (AUM) and $200 billion in revenues.

According to the research, funding for the fintech sector increased to $7.8 billion in 2021 from $2.9 billion the previous year. The money division received the highest funding (44% of the total amount), followed by lending (16%). The relief was divided among wealth tech, insurtech, neo banking, and blockchain and cryptocurrency.

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