Temasek’s Distressed Acquisition of Lendingkart
Lendingkart, is a digital lending platform that focuses on SMEs, (small and medium enterprises) and has recently made announcement that FFH (Fullerton Financial Holdings), a wholly owned subsidiary of Singapore’s Temasek is acquiring a major controlling stake in the firm.
According to the firm, this transaction is pending regulatory approval. The investment will be including a capital integration of up to Rs 252 crore ($30 million) which has allowed Lendingkart to enhance its technology and expand its reach to under-catered markets.
Diving deep into the investment of Lendingkart
The Ahmedabad-based firm Lendingkart said that the capital integration from FFH will enable it to deepen its reach in under-catered areas and serve to the financial requirements of small businesses, as per a statement made by the firm.
The CEO (Chief Executive Officer) of FFH, Hong Ping Yeo, had commented that the investment in Lendingkart is evidence to their continued belief in the MSME opportunity in India and that well-governed and scalable franchises can bring significant value to small businesses.
Till this date, the firm has raised Rs 1,050 crore (approximately $126 million) in equity capital from investors such as Mayfield India, Fullerton, Bertelsmann, Saama Capital, Sistema Asia, and India Quotient.
Read more such articles- Temasek-owned Fullerton to take majority control in cash-strapped Lendingkart for Rs 252 crore (msn.com)
What would be done of this investment?
The company said in a statement on Friday that, through this investment, FFH will be acquiring a controlling stake in the company after mandatory regulatory approvals.
Before this recent funding round, Temasek is already holding a 38% stake in the cash strapped firm.
Any further investment in the capital would rise the stake and would be more than just 38%.
Statistics of Lendingkart
According to its website, the firm Lendingkart is said to disburse loans with an average ticket size of Rs5-6 Lakh to MSMEs. It has so far disbursed more than Rs 18,700 crore to over 3,00,000 business across 4,100 cities.
The firm had been in the market to secure a $30-$50 million equity funding since last year. Unfortunately, the cash integration did not materialize, it picked up $10 million in a venture debt from BlueOrchard.
Although Lendingkart is running its business on a co-lending model, it still managed to stage a turnaround after 2022 with solid profits in the fiscal year 2023. However, it reported a net profit of only Rs3 crore in financial year 2024, owing to asset quality problems and increasing cost of capital.
Conclusion
Lendingkart, is a digital lending platform that focuses on SMEs, (small and medium enterprises) and has recently made announcement that FFH (Fullerton Financial Holdings), a wholly owned subsidiary of Singapore’s Temasek is acquiring a major controlling stake in the firm.
The CEO (Chief Executive Officer) of FFH, Hong Ping Yeo, had commented that the investment in Lendingkart is evidence to their continued belief in the MSME opportunity in India and that well-governed and scalable franchises can bring significant value to small businesses.
According to its website, the firm Lendingkart is said to disburse loans with an average ticket size of Rs5-6 Lakh to MSMEs. It has so far disbursed more than Rs 18,700 crore to over 3,00,000 business across 4,100 cities.
The firm had been in the market to secure a $30-$50 million equity funding since last year. Unfortunately, the cash integration did not materialize, it picked up $10 million in a venture debt from BlueOrchard.
Till this date, the firm has raised Rs 1,050 crore (approximately $126 million) in equity capital from investors such as Mayfield India, Fullerton, Bertelsmann, Saama Capital, Sistema Asia, and India Quotient.
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