Covid, curbs on Chinese investors stung KreditBee. How did it bounce back?

Covid, curbs on Chinese investors stung KreditBee. How did it bounce back?

author-image

Pratik Bhakta

137 reads
author-image

Pratik Bhakta

137 reads

The digital lender navigated a regulatory quagmire by seeing out Chinese backers and shook off the pandemic-linked dip in business by improving collections. Its fee model also delivered. KreditBee has set ambitious disbursement targets amid changing macroeconomic conditions. Can it succeed?

June 20, 2022

10 MINS READ

When Covid-19 struck in 2020, various tech startups were uniquely geared to serve consumers and companies, enjoying an unexpected bounce in business. Indian digital lenders, which had improved credit access and built large books in the preceding years, were not part of that productive group. 

They were caught out by a pandemic-time moratorium on loan repayments, bulging bad assets and regulatory pressure resulting from Chinese app scams. In their season of woe, they struggled to secure funding even as the broader startup ecosystem received a bountiful supply.

Instant lending platform KreditBee, based in Bengaluru, was among the down-on-their-luck players. Unlike some others, it faced an additional headache: it had a co-founder, angels and institutional investors from China, who held a significant stake. Their involvement ran afoul of Indian authorities’ new limits on Chinese investments following the 2020 border tensions. 

On the business side, KreditBee was weighed down by exposure to unsecured, short-term personal loans, the segment where collections fell the hardest during the pandemic. So, from boasting a profit of Rs 130 crore in FY20, it went on to nurse losses of Rs 100 crore in FY21.

share

Share this read

bookmarklike
like
bookmark
share
share-button
like-button
share-button

For subscribers only

Premium Reads

>>

View More >>

Deeply reported and objective news on the country´s fastest-growing companies and the people behind them.