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Indian fintech KreditBee nears $700 million valuation in new funding

Indian fintech KreditBee has raised an additional $100 million in a funding round, it said, as the lender looks to scale its business in the South Asian market.

The new cash infusion is part of the larger Series D funding, which KreditBee said has now closed at $200 million. The new funding, led by Advent International, values the Bengaluru-headquartered startup at about $680 million, according to a source familiar with the matter.

KreditBee, which also counts Mirae Asset Venture Investments, Premiji Invest and Mitsubishi UFJ Financial Group among its backers, offers instant micro loans starting as low as $12 to new-to-credit customers and credit of over $3,500 to salaried professionals. The company says its hope is to serve the 400 million new-to-credit customers in India.

India’s credit bureau data book is thin, making it difficult for banks and other financial institutions to build confidence to extend credit to the vast majority of the population in the South Asian market.

Fintechs use modern-age underwriting systems to lend to customers and a maze of regulatory arbitrage — that is increasingly getting narrow — to operate.

KreditBee works with 10 banks and non-banking financial companies (NBFCs) to finance the loans, it said.

“We are delighted to welcome a long-term financial and strategic partner in Advent. This reinforces the confidence in our profitable business model and the long-term sustainability of it. The latest round will help us to achieve our vision of serving over 400 million middle income population in the country," said Madhusudan Ekambaram, co-founder and chief executive of KreditBee, in a statement.

The startup said it is on track to bulk its asset under management to over $1 billion in the next six to nine months.

Its new funding comes at a time when the deal flow activity has slowed down dramatically in India as investors grow cautious of writing new checks and evaluate their underwriting models after valuations of publicly listed firms take a tumble.

“KreditBee has witnessed several credit cycles and has come out stronger each time reflecting adaptability and resilience of its business model. With this investment, we are strengthening our commitment to back KreditBee’s vision," said Ashish Dave, chief executive of Mirae Asset Venture Investments in India, in a statement.