In a statement, the fintech startup said that the Reserve Bank of India (RBI) has granted its approval for the deal which saw FFH infuse INR 252 Cr in Lendingkart as part of its Series E round.

The lending tech startup added that the acquisition will "strengthen" Lendingkart Group's long-term growth prospects and provide "deeper financial flexibility" to support sustainable growth.

"The successful closure of our Series E round is a strong validation of Lendingkart Group's vision to empower MSMEs with ease of access to credit. With Fullerton's strategic support, we will strengthen our underwriting capabilities, expand our lending capacity, and significantly increase loan disbursals to help small businesses thrive," said Lendingkart founder and MD Harshvardhan Lunia.

Original Story | October 18, 2024, 4:27 PM

MSME-focused fintech startup Lendingkart said that existing investor Fullerton Financial Holdings (FFH) will acquire a controlling stake in the startup with an additional investment of INR 252 Cr.

FFH is a wholly owned portfolio company of Singapore-headquartered Temasek.

Following the investment, FFH will become a majority controlling shareholder in the fintech startup, Lendingkart said in a statement.

"The capital infusion from FFH will enable Lendingkart to deepen its reach in underserved markets and enhance its technology, taking a giant leap towards fulfilling its mission of fostering financial inclusion for small businesses in India," it added.

Commenting on the investment, FFH CEO Hong Ping Yeo said, "Our investments in Lendingkart are a testament to our continued belief in the MSME opportunity in India and that well governed, scalable franchises can bring significant value to small businesses."

Founded in 2014 by Harshvardhan Lunia and Mukul Sachan, Lendingkart provides loans to MSMEs and has two main revenue sources - income from interest and financial services offerings. It competes against the likes of Incred, Yubi, Indifi and Kinara Capital among others.

On the funding, Lendingkart founder and managing director Lunia said, "With FFH's backing, we aim to bring more small businesses into the formal lending ecosystem and stay true to our mission- Simplifying MSME Finance."

The latest development comes a day after it was reported that FFH was looking to up its stake in the fintech startup to 60% from its current holding of 38% amid a cash crunch due to challenges in the unsecured loans market.

FFH has already injected around INR 772 Cr into the company, till date.

Lendingkart raised around INR 319 Cr in its Series D round led by existing investor FFH in 2020. Overall, the startup has raised a total funding of over $340 Mn till date and counts the likes of Bertelsmann, Mayfield India, Saama Capital, Sistema Asia, India Quotient among others, as its investors.