creditvidya: Cred acquires CreditVidya as fintech consolidation continues
Following the acquisition, CreditVidya will continue to operate independently and its more than 200 employees will have access to Cred’s employee share ownership plan (Esop).
The acquisition comes at a time when the Indian lending sector is heading towards consolidation as the Reserve Bank of India’s (RBI) first set of digital lending guidelines emphasizes the role of regulated entities such as non-banks, while reducing lending distribution platforms to mere direct sales agents.
ET first reported on November 25 that digital payments major PhonePe was set to acquire buy-now-pay-later platform ZestMoney, marking a major consolidation move in the sector. Founded in 2012, CreditVidya offers a loan underwriting platform that helps banks and non-banking financial companies (NBFCs) assess credit better. Through application programming interface (API) integration, the company also helps companies build in customized credit products for their customers.
“Expanding access to credit is a key driver of economic progress. CreditVidya’s patented technology stack uncovers signals of trust among underserved cohorts. We look forward to supporting them in driving an inclusive credit ecosystem,” says Kunal Shah, Founder, Cred.
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Interestingly, while CreditVidya is focused on including first-time borrowers in the credit economy, Cred has largely focused on people with credit cards and high credit scores.
“We have invested in building category-defining products that provide financial services to credit-underserved Indians through our partners, transforming how risk is assessed and trust measured to drive financial inclusion. In our next phase of growth, as we build brand and scale distribution, we are excited to learn from the Cred team,” said Abhishek Agarwal, Co-Founder and CEO, CreditVidya.
CreditVidya has raised approximately $10 million and counts the likes of Kalaari Capital, Matrix Partners and Bharat Innovation Fund as key investors.
Over the past two years, Cred has focused on upping its credit game. In September, it said it would pay $10 million to buy a minority stake in peer-to-peer (P2P) non-bank finance company LiquiLoans. It enabled P2P loans for users through the launch of Cred Mint in collaboration with LiquiLoans.
Cred is also a supporter of the debt market CredAvenue. It also operates an active credit line for its customers with Cred Cash, launched in 2020 in partnership with other lenders.
ET reported in November 2021 that Shah had acquired NBFC Parfait Finance & Investment through Newtap Technologies, an entity he floated personally.
Previously, Cred acquired platform Happay and liquor delivery app HipBar for its corporate spend management platform for the prepaid payment instrument (PPI) license.
