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| Edited By: DNA Web Team |Source: DNA Web Desk |Updated: Aug 31, 2022, 09:15 AM IST
Tiger Global-backed Psi Phi Global Solutions Pvt. Ltd, which owns the OkCredit brand, , has been placed on the market after failing to secure new funding, said three people with knowledge of the company’s plans.
The kirana tech business has hired financial services company InCred to find a buyer, according to the individuals named above who asked to remain anonymous. According to them, OkCredit is today valued at $40 to $50 million, significantly less than the $83 million it had garnered from investors over the course of three investment rounds.
“The sale talks come on the back of a failed fundraising attempt by the company," said one of the people cited above. OkCredit planned to raise $40 million in the new round, the person added.
Tiger Global and Lightspeed led a $67 million Series B round of investment for OkCredit in September 2019. The same year, it secured $15.5 million in funding for a Series A round from investors including Tiger Global. It has received startup funding from Lightspeed before that in 2018.
“The company has approached a few strategic investors. However, with OkCredit not having monetized its business much, it’s a difficult asset to sell,” mentioned the individual cited above.
The individual mentioned Rupifi, a digital business-to-business (B2B) platform providing loans, working capital, and cost providers to small companies, had engaged in talks with OkCredit however a deal couldn’t be reached.
VCCircle reported earlier this year that the company has reduced its personnel from 150 employees in half and was aiming to refocus its business model in the direction of fintech activities. According to VCCEdge, the information intelligence platform of VCCircle, its revenue in FY21 was 5.8 crore rupees, and internet gross sales were practically nonexistent. Its profits before interest, taxes, depreciation, and amortisation losses decreased from 155.7 crore to 107 crore in FY21.
Another report in April by information portal Entrackr mentioned the corporation has determined to close its e-commerce enablement platform, OkShop.
Kirana tech startups that are similar to Khatabook and OkCredit have had difficulty growing and turning a profit. These businesses have made an effort to diversify from only offering digital bookkeeping services and have added financing to increase margins and gain momentum among the larger kirana store community.
According to a report released earlier this month by venture capital firm Chiratae Ventures and consulting firm EY, India's whole fintech industry is predicted to grow tenfold by 2030 to reach an asset under management (AUM) of $1 trillion and sales of $200 billion.
The report confirmed that funding within the fintech sector surged to $7.8 billion in 2021 from $2.9 billion within the earlier 12 months. The funds section attracted probably the most funding at 44% of the overall quantity, adopted by lending (16%). The relaxation was distributed amongst wealthtech, insurtech , neobanking, and blockchain and crypto.
