FinAccel, the guardian firm of Indonesian fintech lender Kredivo, has agreed to merge with US-based Victory Park Capital’s second clean cheque agency at a valuation of $2.5 billion.
The announcement confirms an earlier report by DealStreetAsia in Might.
The transaction will give Kredivo proceeds of $430 million, together with a non-public placement (PIPE) of $120 million led by Marshall Wace, Corbin Capital, SV Funding, Palantir Applied sciences, Maso Capital, and sponsor Victory Park Capital. FinAccel’s present traders NAVER and Sq. Peg Capital may even be a part of the bid, contributing $55 million.
The merger is anticipated to shut by the primary quarter of 2022.
The opposite traders on Kredivo’s cap desk embody Mirae Asset, Jungle Ventures, Singtel Innov8, Telkomsel Indonesia, MDI Ventures, Cathay Innovation, DST Companions, and Kejora Intervest.
Based in 2016, Kredivo is certainly one of Indonesia’s largest prompt credit score financing corporations with almost 4 million prospects as we speak. It offers financing for e-commerce purchases, offline purchases in addition to private loans. Its customers may entry ‘purchase now and pay later’ (BNPL) financing at low rates of interest, whereas its service provider companions profit from prompt point-of-sale financing.
In keeping with Kredivo, it at present has an at the least 50% share of the BNPL market throughout main Indonesian e-commerce retailers like Bukalapak and Lazada, and faucets on synthetic intelligence (AI) to risk-assess its loans to prospects. In Indonesia, Kredivo competes with a number of gamers together with Sequoia-backed digital credit score lender Akulaku, peer-to-peer lender UangTeman, in addition to on-line marketplaces and fee startups like Tokopedia, Traveloka, and OVO.
The agency added plans to enter new regional markets in coming months. It expects to launch in Vietnam by way of a three way partnership in Q3 2021, Thailand in Q1 2022 and the Philippines in Q2 2022. Kredivo added that related licenses have been acquired in Thailand and the Philippines for its entry.
“…Conventional banks in Southeast Asia have traditionally supplied little shopper credit score in our markets, which creates a big alternative for Kredivo to faucet into different credit score wants, equivalent to private loans, and fulfil our imaginative and prescient of offering quick, reasonably priced, and simply accessible credit score to tens of tens of millions of consumers within the area,” stated Akshay Garg, co-founder and CEO of FinAccel.
“Contemplating that 66% of Southeast Asia’s inhabitants is unbanked or under-banked, we additionally see a really enticing alternative to serve these prospects with different monetary companies, outdoors of credit score,” added Garg.
Victory Park Capital isn’t any stranger to Kredivo, having beforehand issued Kredivo two rounds of debt — the primary being a $100 million debt facility in November 2020, and an extra $100 million extra not too long ago in June.
“Since our preliminary funding in 2020, we proceed to be impressed by Kredivo’s speedy development and robust credit score metrics and unit economics,” stated Gordon Watson, co-CEO of VPCB and companion at VPC. “The corporate has created a powerful platform that permits it to develop into new markets. Its world-class administration group has a confirmed capacity to not solely execute on its technique, but in addition revolutionize fintech throughout Southeast Asia.”
Kredivo generated $74 million in annual income in 2020, whereas clocking transaction volumes of $574 million in 2020 from 2.2 million cumulative customers on its platform. The agency is projecting revenues to greater than double to $163 million this 12 months, on the again of rising demand for purchase now pay later (BNPL) financing in Indonesia the place lower than 3 per cent of its 260 million inhabitants possesses a bank card.
Goldman Sachs (Singapore) was the monetary advisor for Kredivo, whereas Citigroup was the capital markets advisor to VPCB. Citigroup, Jefferies, and Goldman Sachs (Singapore) additionally function co-placement brokers on the PIPE.