Claypond Capital, Axis Bank, and new investors intend to invest in Rupeek at a lower valuation. Investment details are being finalized, and existing investors are considering selling shares. Rupeek previously secured funding from 360 One at a significant discount.
Claypond Capital, the investment arm of Manipal Group chairman Ranjan Pai, and private sector lender Axis Bank are in negotiations to invest in gold loan startup Rupeek, according to persons familiar with the situation. According to sources, the valuation of the Accel- and Peak XV Partners-backed startup will most certainly be reduced as a result of the round.
Talks with Axis Bank are in the early stages, and the new investment group is finalizing its plans, they said.
“Pai’s office is looking to invest in Rupeek, but the amount has not yet been determined,” said one of the sources. “Axis Bank’s cooperation will also be critical to the transaction. “The valuation would be between $200 and $250 million.”
Existing investors will also participate in the round by selling shares in part.
According to Registrar of Companies (RoC) documents, Rupeek raised around Rs 50 crore from asset management firm 360 One, formerly known as IIFL Wealth, on March 20, 2024. It is acquiring the fresh capital at a discount of around 60% to its peak valuation of $600 million in July 2022.
ET initially reported on March 15 about a possible down round at Rupeek, aided by a slowdown in operations and a regulatory crackdown on the sector.
A down round occurs when a company gets new financing at a lower valuation than its prior one.
Manipal’s Pai declined to respond. Rupeek’s CEO, Sumit Maniyar, and Axis Bank did not reply to inquiries.
According to the persons stated above, Axis Bank intends to further its integration with Rupeek in order to provide a doorstep gold lending service for its customers, similar to what Federal Bank and others offer. The institution has seen a significant increase in gold loan disbursals, which are already expanding at a compounded monthly growth rate of 94% in the final six months of FY24.
“The investment could be part of Rupeek’s partnership with Axis Bank for gold lending.” However, the conversations are still in their early stages, according to a source.
According to RBI data, outstanding gold loans were Rs 1 lakh crore in March, up from Rs 89,382 crore the previous year.
In March, the RBI directed IIFL Finance to discontinue offering gold loans to its customers. On May 1, ET reported that the central bank had also expressed worry over gold loan disbursements by banks through fintech partnerships.
“The regulatory environment has had a wider impact on investor sentiment as well as future growth prospects,” said a fintech investor who is aware of the potential transaction. “That’s reflected in new funding valuations.”
The Bengaluru-based firm has also experienced a slowdown in disbursals, with assets under management (AUM) remaining nearly flat in December last year at Rs 1,659 crore, compared to Rs 1,669 crore in March 2023. However, asset quality improved, with loans due for more than 90 days at 2.3% in December, compared to 4.1% nine months ago.
Since its launch in 2015, Rupeek has raised around $164 million from Accel, Bertelsmann, and other investors.
