Exclusive: Lendingkart To Raise INR 100 Cr Debt From InnoVen Capital

Fullerton-backed fintech soonicorn Lendingkart is raising INR 100 Cr (around $11.7 Mn) in venture debt from InnoVen Capital.

The board of Lendingkart passed a resolution on May 14 to issue 10,000 non-convertible debentures (NCDs) at INR 1 Lakh each to raise the sum from InnoVen Capital India Fund in two tranches, as per its regulatory filings sourced from the Registrar of Companies (RoC).

The Ahmedabad-based digital lending platform plans to use the fresh capital for general corporate purposes (including repayment of existing debt or investment in its subsidiary), a company spokesperson told Inc42.

The development comes months after Temasek-owned Fullerton Financial Holdings acquired a controlling 55.57% stake in Lendingkart for INR 252 Cr. Prior to that round, Fullerton held a 38% stake in the NBFC.

It is to be highlighted that the aforementioned funding round also reportedly saw Lendingkart take a massive valuation cut to $100 Mn from its peak valuation of $350 Mn in 2020.

Founded in 2014 by Harshvardhan Lunia, Lendingkart is a digital-only lending platform, providing unsecured business loans to small and medium enterprises (SMEs) with an average ticket size of INR 60-70K. It also provides personal loans of up to INR 5 Lakh under the brand name Upwards.

Overall, it has raised over $370 Mn in funding to date and also counts Stride Ventures, BlueOrchard and Yubi among its backers.

In the homegrown digital lending space, set to become a $1.3 Tn+ market opportunity by 2030, Lendingkart competes against the likes of Moneyview, Kissht and KreditBee, all of which are preparing to launch an initial public offering (IPO) soon.

Shrinking Bottom Line, Leadership Rejig: Is Lendingkart’s IPO Dream Slipping?

The latest funding plan comes at a critical time for Lendingkart, which is under pressure amid deteriorating asset quality and profitability. For the nine months ended December 31, 2024 (9M FY25), Lendingkart reported a consolidated net loss of INR 253.1 Cr against a profit of INR 3.3 Cr in FY24 and INR 118.8 Cr in FY23, according to India Ratings.

The rating agency attributed the degrowth in the bottom line to rising credit costs on average AUM, resulting from deterioration in asset quality. “The return on average AUM turned negative in 9MFY25 (annualised) (FY24: 0.05%), and is likely to have deteriorated further in FY25.”

Amid these challenges, former MD and head of consumer banking at DBS Bank Prashant Joshi was roped in as CEO of Lendingkart by Temasek last month.

In 2023, Joshi’s predecessor said that Lendingkart planned to launch an initial public offering (IPO) once assets under management (AUM) surpassed INR 10,000 Cr in the next 18-24 months. As of March 31, 2024, the startup’s AUM stood at INR 7,250 Cr.

As per India Ratings, Lendingkart added INR 2,807.5 Cr to its AUM in 9M FY25, crossing the INR 10,000 Cr threshold set by the management. However, in a statement to Inc42, the fintech company said today that it has no plans for an IPO at this stage.

It is pertinent to mention that the Reserve Bank of India (RBI) has been cracking the whip on NBFC fintechs, particularly those operating in the larger unsecured loan market. The RBI crackdown saw the likes of IPO-bound Navi and DMI Finance getting banned from sanctioning loans last year.

Despite regulatory hurdles and the ongoing market uncertainty, several new-age fintech companies are gearing up for a public listing soon. Earlier this week, investment tech startup Groww filed preliminary papers for its IPO with markets regulatory SEBI via the confidential pre-filing route. The likes of Razorpay, PhonePe and Pine Labs have recently converted into public companies in preparation for their stock market listings.

On the contrary, quick commerce unicorn Zepto has postponed its public listing plans. Earlier in May, sources told Inc42 that the quick commerce unicorn, which was expected to file draft papers for its $800 Mn to $1 Bn IPO by March-April, has now shifted the goalpost to FY26.