In a strategic move to fuel its growth trajectory, online gold loan platform Rupeek recently secured Rs 50 crore from 360 One Large Value Fund (formerly IIFL Wealth Management). However, what caught my attention was the staggering 60% reduction in the company’s valuation in this latest round.
As per Rupeek’s regulatory filing, the funding involved issuing 1,307 compulsory convertible preference shares for Rs 3,82,492 each. The company plans to allocate these funds towards its expansion, general corporate activities, and overall growth strategy.
Despite the valuation dip, Rupeek managed to attract around Rs 43 crore from existing investors during FY24, including Peak XV, Bertelsmann, Accel India, and GGV Investments. The company’s current valuation post-allotment stands at approximately Rs 2,050 crore or $250 million, marking a significant decline from its peak valuation of $634 million in January 2022.
Recent reports hinted that Rupeek was in discussions to raise funds from Claypond Capital and Axis Bank at a valuation ranging between $200-250 million.
Rupeek, founded by Binny Bansal, boasts of streamlining gold loan services, offering a seamless process from underwriting to disbursal within 30 minutes. With around $150 million raised to date, its largest external stakeholder remains Peak XV, followed by Accel and Bertelsmann. The new investor, 360 One Large Value Fund, now holds 2.44% post-allotment.
Despite a 27.6% decline in revenue from operations to Rs 89 crore in FY23 and reported losses of Rs 281 crore in the same fiscal year, Rupeek remains a significant player in the online gold loan market. It faces competition from the likes of Oro Money, Ruptok, Yellow Metal, and Indiagold, backed by PayU.
The decision to accept the valuation cut reflects Rupeek’s forward-looking approach. Rather than dwelling on past valuations, the company focuses on securing funding for its plans. This move demonstrates the founders’ credibility, even in challenging times, as they prioritize the company’s growth over maintaining a specific valuation.
For Rupeek, it’s about looking ahead and seizing opportunities, showcasing resilience and adaptability in navigating the dynamic landscape of the fintech industry.
