The two businesses announced on Friday that FinTech firm Cred will contribute $10 million to buy a minority share in peer-to-peer (P2P) non-banking finance venture LiquiLoans.
Cred will acquire 5-6% of the firm, giving it a value of roughly $200 million.
According to people with knowledge of the negotiations, the round consists of both main and secondary capital. The agreement will allow early angel investors in LiquiLoans to cash out.
According to the aforementioned individuals, the deal is anticipated to finalize within the next three to four weeks.
The Kunal Shah-led business teamed up with LiquiLoans in August of last year to allow P2P lending for customers through the introduction of a brand-new investment product called Cred Mint.
Users of Cred were given the opportunity to “invest” their funds in a capital pool that would be utilized to lend to platform users looking for personal loans.
According to Shah’s comments as per reports from a year ago, investors in the product would receive an interest rate of about 9% while loans would be given at 12–13%.
As part of the agreement, LiquiLoans, which claims to have been profitable from inception, will investigate a strategic partnership to enhance its technological capabilities.
Mittal and Gautam Adukia founded LiquiLoans in 2018, a loan platform that matches borrowers and lenders using technology. It also gets rid of the margins that conventional banks and NBFCs demand.
The business raised $1.68 million (about Rs 12 crore) in January 2019 as part of a pre-Series A investment that was spearheaded by Matrix Partners. Shah took part in the round as well.
