Cred will pick up about 5-6% in the company, valuing it at around $200 million.
The round is a mix of primary and secondary capital, sources aware of the discussions told ET. The deal will give an exit to early angel investors in LiquiLoans.
The transaction is expected to be closed in the next three to four weeks, the people quoted above added.
Last August, the Kunal Shah-led company
partnered with LiquiLoans to enable P2P lending for users through the launch of a new investment product, Cred Mint.
The offering allowed Cred users to ‘invest’ their savings in a capital pool, which would be used to lend to customers seeking personal loans on the platform.
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Those investing in the product would earn around 9% interest, while the loans would be disbursed at 12-13%, Shah told ET last year.
LiquiLoans, which says it has been profitable since inception, will explore a strategic relationship to strengthen its technology capabilities, as part of the deal.
“We have traditionally stayed away from funding. So whatever we have built is with limited funding. Cred is an aspirational brand (for many) in terms of how consumer-facing tech and design should look. With this round of funding, we will get access to mentoring from their (Cred’s) senior leadership on how to build a technology stack and scale the infrastructure,” Achal Mittal, cofounder of LiquiLoans told ET in an interaction.
Achal Mittal, cofounder of LiquiLoans told ET in an interaction. At present, LiquiLoans also partners with Cred on its credit-line product, Cred Cash.
Founded in 2018 by Mittal and Gautam Adukia, LiquiLoans is a lending platform that uses technology to match borrowers and lenders. In the process, it eliminates the margins charged by traditional banks and NBFCs.
In January 2019, the company raised $1.68 million (about Rs 12 crore) as part of its pre-Series A round, led by Matrix Partners. Shah also participated in the round.
“Liquiloans has innovated in creating trust-centred financing products and is a leader in peer-to-peer lending with a strong management team. Their work has helped expand access to credit, and we look forward to partnering with them in their next phase of growth and innovation,” Shah said.
In June, according to regulatory filings with the Ministry of Corporate Affairs,
Cred raised Rs 617 crore (about $80 million) in the first tranche of its latest funding round.
The company told ET it
was raising $140 million in a mix of primary and secondary deals, which would value it at around $6.4 billion.
Singapore’s GIC led the round, with existing investors Sofina, Tiger Global, Falcon Edge and Dragoneer also participating.
