Fintech startup Cred will capitalize on $10 million to acquire a minority stake in peer-to-peer non-banking financial company LiquiLoans.
CRED had partnered with Liquiloans when it was started along with Mint, its P2P lending product, which encourages users to pool their unused capital together and on-lend to those seeking personal loans. The platform pledged users lending on CRED a return of 9%, while loans were specified to be disbursed at 12%-13% interest, per annum.
I LiquiLoans was launched by Gautam Adukia and Achal Mittal to empower retail investors with a platform to access retail borrowers. The company has raised capital from Matrix Partners in history.
CRED Mint was launched a previous year after the startup realised its members, on average, had around Rs 2 lakh sitting idle in their banks. The company’s idea was to motivate people to put that capital to work by lending to others on the platform.
Cred’s entire user base grew to 7.5 million in 2021, the company said in March this year, adding that it enables over 25% of credit card bill payments. The company reported a 45% boost in its net loss for FY21 after marketing expenses soared during the year, according to an official document shared by Cred in March. Cred’s loss widened to ₹524 crores for FY21 from ₹360 crores in the previous year.
“Liquid Loans 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,” said Shah.
