Sequoia leads $90 mn Series A funding in enterprise debt marketplace CredAvenue

Chennai-based enterprise debt marketplace CredAvenue has raised $90 million in a Series A funding round led by venture capital investor Sequoia Capital India to build a platform to power debt markets.

The funding round was co-led by Lightspeed, TVS Capital Funds, and Lightrock (formerly known as LGT Lightstone Aspada). Kunal Shah-led fintech firm CRED and Venture debt firm Stride Ventures also participated in the round, the company said in a statement.

The fresh capital will primarily be invested on building a platform that comprises of fixed income bond, co-lending, working capital, supply chain and securitisation. Investments will also be made on building a data platform and ramping up client base.

The company said it will invest heavily in data science, machine learning and artificial intelligence over the next few months to improve its product offerings, across each of these sub platforms.

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"CredAvenue is a unique solution that not only simplifies access to credit for borrowers ranging from a BB to AA rating but also improves access to multiple debt products like bonds, supply chain financing, etc. on a single unified platform. We believe, it has the opportunity to become the platform of choice for borrowers and lenders operating in the debt market" Sakshi Chopra, MD, Sequoia India, said.

CredAvenue connects enterprises with lenders and investors, and facilitates discovery, investment and fulfillment. The company claims to have facilitated transactions worth $9 billion through the platform, serving over 1,500 institutional borrowers and 750 investors.

"After the onset of Covid, we saw the market completely changing from being a liquidity-starved market to a credit market; therefore, the challenge now is not around liquidity, but more around credit risk. That's when both sides of the market started trusting us more and more, and the traction has been tremendous," Gaurav Kumar, founder and CEO of CredAvenue, told Business Today. Consequently, the firm clocked over $3 billion in discovery and $3.5 billion in fulfillment, he claimed.

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Kumar previously co-founded Vivriti Capital, an online enterprise debt platform and lender, along with Vineet Sukumar. Vivriti Capital is a non-deposit taking NBFC and lends directly from its balance sheet. It has raised over $100 million and is now majority-owned by US-based Creation Investments.

CredAvenue, earlier part of Vivriti, was hived off as a separate entity and Kumar moved on to focus full time on it last year. Vivriti is a minority shareholder in CredAvenue and also lends on the platform.

Avendus Capital was the exclusive financial advisor to CredAvenue for the transaction.

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