Chennai-based Credavenue paid Rs 400 crore for gaining majority control of the five-year-old Spocto. Post deal, a statement from Credavenue said it will now be the first global debt marketplace that caters to every stage of the enterprise lending lifecycle.
Debt marketplace CredAvenue has made its first acquisition by picking up a majority stake in the digital debt collection platform — Spocto Solutions.
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The move comes soon after CredAvenue closed one of the largest Series A funding rounds, securing $90 million in September last year.
By bringing Spocto into its fold, CredAvenue — which connects companies with financiers for debt funding — can now close the loop of the lending lifecycle by helping lenders with digital debt recovery. Now, financiers will be able to provide financing, track repayments and initiate recoveries on a single platform.
"This deal is a forward integration that completes the product suites for the entire lifecycle. It will shrink the resources and time required for collection while improving the recovery rate. From a broader perspective, it will improve the overall asset quality of our bank and NBFC partners," said Gaurav Kumar, Founder and CEO, CredAvenue.
Currently, CredAvenue claims to have facilitated debt funding of over Rs 90,000 crore to over 2,300 corporates with more than 750 participating on its platform.
Besides gaining access Spocto's artificial intelligence and machine learning-driven debt collection process, CredAvenue is also looking to tap the Mumbai-based startup's global clientele and network.
Founded by Sumeet Srivastava and Puja Srivastava in 2016, Spocto helps reduce fraud by tracking absconding borrowers through any digital footprint across the world. The debt collection platform handles over $50 billion in assets under management with more than 37 global clients across markets such as West Asia, UAE, and India.
"This deal is based on a strong synergy between CredAvenue and Spocto in offering data-driven, tech-first services to the lender and borrower communities and strengthening the debt ecosystem," said Sumeet Srivastava, Co-founder and CEO, Spocto Solutions.
The acquisition comes when debt funding is fast emerging as an essential source of capital, especially for startups. In 2021, over $600 million were raised by new-age companies in a bid to control equity dilution, manage working capital needs and fuel credit-based lending offerings, as per market estimates.
A startup such as Bizongo, a B2B platform for made-to-order goods, has used CredAvenue to ease supply-chain financing challenges for its partner MSME manufacturers. According to a World Bank report, the current MSME credit gap in India stands at $380 billion. CredAvenue is among a host of startups seeking to enable easier access to credit while providing lenders with the requisite tools to track repayment and recovery.
(Edited by : Amrita Das)
First Published: IST