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Cred to buy CreditVidya

Updated: Dec 2, 2022

Fintech startup Cred has recently assented to buying credit of Software provider CreditVidya in a speculated equity and cash deal.

Cred to buy CreditVidya

What's happening: Subject to National Company Law Tribunal approval, fintech company Cred is reportedly buying shares of CreditVidya in a deal consisting of equity as well as cash. Post-purchase of CreditVidya to continue operating independently.

  • CreditVidya's employees will gain access to Cred's ESOP.

Backdrop: The acquisition comes at a time when the Indian sector of online lending is coming towards consolidation owing to the Reserve Bank of India's recently launched digital lending guidelines.

  • These guidelines emphasize the role of regulated entities such as non-banks in a way that reduces lending and distribution platforms as mere selling agents.

  • Another big consolidation move in the sector was the acquisition of pay later platform ZestMoney by PhonePe.

Parties involved: CreditVidya was founded in 2012 as a loan underwriting platform helping banks as well as non-bank financial companies assess better credit.

  • In contrast with CreditVidya which focused on inclusion of first-time borrowers in credit economy, Cred has largely focused on people with credit cards and higher credit score ratings.

By the numbers: CreditVidya has since its its inception raised around $10 Million in totality and roped in investors like Kalaari Capital, Matrix Partners and Bharat Innovation Fund.

  • Cred is backing the debt marketplace CredAvenue, operating an active credit line with Cred Cash and acquired corporate spendings management platform Happay amongst its diverse portfolio.

What's next: The acquisition allows Cred to tap into CreditVidya 's consumers which includes those without a credit score enabling Cred to expand its overall consumer base.


Conclusion: Cred's acquisition of CreditVidya allows for it to expand its customer base and tap into the potential of those consumers without a credit score.




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