Kunal Shah's Newtap Technologies raise $50-70 million to push lending business
Kunal Shah's support As it seeks to raise separate capital for its non-banking finance company (NBFC), Newtap Technologies, Cred is strengthening its credit play, according to at least three insiders. Shah founded Newtap Technologies in 2021, and the company has talked about raising $50 to 70 million to expand its involvement and credit exposure to Cred's customer base.
Cred currently owns 20% of Newtap Technologies, with Shah personally owning the remaining 80%. The company has designated Shah and his brother Rohan Shah Naresh as directors. According to them, Shah has talked about securing funding from Cred's current investors, including Sequoia Capital and Singapore's sovereign fund GIC, which will value the NBFC subsidiary at about $250 million.
Sequoia was one of Cred's early supporters, while GIC oversaw a mix of primary and secondary funding in the amount of Rs 617 crore (about $80 million) last year. Shah purchased Parfait Finance & Investment back in November 2021 through NewTap Technologies, an NBFC that is regulated with the Reserve Bank of India (RBI).
Cred's thinking, the goal of injecting equity capital was to increase trust in its NBFC firm and raise debt capital to maintain an equity-to-debt ratio similar to that of most other NBFC businesses. To increase user engagement on its platform, Cred has been pushing hard for its Unified Payments Interface (UPI) offering. In October 2022, it initially introduced UPI to its platform. The fintech platform aims to cross-sell other financial services like credit here as interaction rises, the sources claimed.
The regulator has given the go-ahead for pre-approved credit lines at banks to be operated through UPI. For its NBFC business, Cred is considering an equity investment. Fintechs must be regulated, as was made apparent by the digital lending guidelines last year, but there is increased activity right now because most participants want to start lending from their own NBFC units and lessen reliance on partnerships, according to one of those quoted above. "Co-lending and direct loans from book it will be a mixture of both moving forward for fintech NBFCs," the source familiar with Cred's intentions said.
Additionally, the addition of credit lines to UPI will pave the way for a boom in online lending. The industry is awaiting the regulator's directive to open up to NBFCs as well, the source claimed. GIC, Sequoia Capital, and Cred did not return calls. Presently, Parfait Finance and Investments powers Cred's buy-now-pay-later service Cred Flash, which was introduced in February of this year to a small group of users.
Other credit products offered by the company include Cred Cash, which allows consumers to receive personal loans directly into their bank accounts. In collaboration with P2P NBFC LiquiLoans, Cred also operates Cred Mint, a peer-to-peer (P2P) lending and investment platform. members can lend money to other Cred members using Cred Mint and earn up to 9% interest. The P2P NBFC was valued at $200 million when the fintech also committed $10 million for a 5-6% interest in LiquiLoans in September of last year.
Web-based publication about Monday afternoon, The Arc was the first to report about Newtap's equity injection. The revelation that Cred is investing more in Newtap comes as other fintechs are attempting to expand their lending operations.
Jupiter, a new venture in neobanking, received an NBFC licence from the central bank this week, enabling it to disburse credit from its books. Jitendra Gupta, the founder of Bengaluru-based Amica Financial Technologies Ltd, which manages Jupiter, the Sequoia and Tiger Global-backed firm, plans to seek an additional Rs 100 crore in debt to finance its credit operations in addition to capitalising its loan business with approximately Rs 100 crore. It plans to award short- and medium-term personal loans around Rs 600–700 crore annually.
Cred currently owns 20% of Newtap Technologies, with Shah personally owning the remaining 80%. The company has designated Shah and his brother Rohan Shah Naresh as directors. According to them, Shah has talked about securing funding from Cred's current investors, including Sequoia Capital and Singapore's sovereign fund GIC, which will value the NBFC subsidiary at about $250 million.
Sequoia was one of Cred's early supporters, while GIC oversaw a mix of primary and secondary funding in the amount of Rs 617 crore (about $80 million) last year. Shah purchased Parfait Finance & Investment back in November 2021 through NewTap Technologies, an NBFC that is regulated with the Reserve Bank of India (RBI).
Cred's thinking, the goal of injecting equity capital was to increase trust in its NBFC firm and raise debt capital to maintain an equity-to-debt ratio similar to that of most other NBFC businesses. To increase user engagement on its platform, Cred has been pushing hard for its Unified Payments Interface (UPI) offering. In October 2022, it initially introduced UPI to its platform. The fintech platform aims to cross-sell other financial services like credit here as interaction rises, the sources claimed.
The regulator has given the go-ahead for pre-approved credit lines at banks to be operated through UPI. For its NBFC business, Cred is considering an equity investment. Fintechs must be regulated, as was made apparent by the digital lending guidelines last year, but there is increased activity right now because most participants want to start lending from their own NBFC units and lessen reliance on partnerships, according to one of those quoted above. "Co-lending and direct loans from book it will be a mixture of both moving forward for fintech NBFCs," the source familiar with Cred's intentions said.
Additionally, the addition of credit lines to UPI will pave the way for a boom in online lending. The industry is awaiting the regulator's directive to open up to NBFCs as well, the source claimed. GIC, Sequoia Capital, and Cred did not return calls. Presently, Parfait Finance and Investments powers Cred's buy-now-pay-later service Cred Flash, which was introduced in February of this year to a small group of users.
Other credit products offered by the company include Cred Cash, which allows consumers to receive personal loans directly into their bank accounts. In collaboration with P2P NBFC LiquiLoans, Cred also operates Cred Mint, a peer-to-peer (P2P) lending and investment platform. members can lend money to other Cred members using Cred Mint and earn up to 9% interest. The P2P NBFC was valued at $200 million when the fintech also committed $10 million for a 5-6% interest in LiquiLoans in September of last year.
Web-based publication about Monday afternoon, The Arc was the first to report about Newtap's equity injection. The revelation that Cred is investing more in Newtap comes as other fintechs are attempting to expand their lending operations.
Jupiter, a new venture in neobanking, received an NBFC licence from the central bank this week, enabling it to disburse credit from its books. Jitendra Gupta, the founder of Bengaluru-based Amica Financial Technologies Ltd, which manages Jupiter, the Sequoia and Tiger Global-backed firm, plans to seek an additional Rs 100 crore in debt to finance its credit operations in addition to capitalising its loan business with approximately Rs 100 crore. It plans to award short- and medium-term personal loans around Rs 600–700 crore annually.
