Advent-backed Kreditbee flips back to India, to merge entities ahead of IPO

Advent International-backed lending startup KreditBee is merging its two India entities as it prepares for a local listing next year, two people with knowledge of the development said.

The move comes after the Bengaluru-based startup shifted its domicile to India after dissolving its Singapore parent, these people said.

KreditBee has paid around $100 million in tax to move its headquarters to India, the second of the two persons cited earlier said, both of whom spoke on the condition of anonymity. 

“Finnovation Tech and KrazyBee, the two Indian entities having mirror shareholdings, are getting merged. This is in line with the preparation that needs to be done ahead of listing in India,” the first person said.

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The management had invited investment banks to help them prepare a roadmap for listing in India, and the bankers have asked the company to merge the entities to clear regulatory requirements as part of that process, the second person said.

The Reserve Bank of India mandates lending entities to be domiciled in India ahead of local listings. “Now with the flip-back done and the two entities likely to merge by end of the current financial year, the stage would be set for listing. A formal appointment of bankers for the IPO will happen only next year,” this person added.

When contacted, Madhusudan Ekambaram, the co-founder and CEO of KreditBee, declined to comment.

The company, which raised $200 million in a funding round led by US-based private equity firm Advent International in January 2023, is expected to raise a pre-IPO round in the second half of current financial year.

“In October-December this year, the company will raise a pre-IPO round, paving way for partial exits from some early backers and also bring on board long-term investors,” the second person added. 

Investor backing

KreditBee's investors include Advent International, Premji Invest, Motilal Oswal Alternates, MUFG Bank, TPG-backed NewQuest Capital Partners, and Mirae Asset Ventures. “The new funding round is likely to be upwards of $100-150 million, with the company targeting a $500 million IPO raise,” the first person said.

KreditBee was last valued at $700-800 million in 2023.

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As per news reports, Finnovation Tech Solution, the parent company of lending platform KreditBee, saw a 26.5% rise in profit to ₹126.4 crore for the financial year ended 31 March, 2024, from ₹99.92 crore in the previous year. KrazyBee, the non-bank lending arm of the company, saw its net profit more than triple to ₹200.3 crore in FY24.

KreditBee joins a long list of profitable startups that are looking to tap buoyant Indian capital markets and help their existing investors find exits. Companies such as Groww, Razorpay, Udaan, Meesho, Zepto, PhonePe, PineLabs are either in the process or likely to begin their journey to list here by flipping back to India.