FinAccel’s Kredivo to merge with Victory Park’s second SPAC at $2.5b valuation

FinAccel, the parent company of Indonesian fintech lender Kredivo, has agreed to merge with US-based Victory Park Capital’s second blank cheque firm at a valuation of $2.5 billion.

The announcement confirms an earlier report by DealStreetAsia in May.

The transaction will give Kredivo proceeds of $430 million, including a private placement (PIPE) of $120 million led by Marshall Wace, Corbin Capital, SV Investment, Palantir Technologies, Maso Capital, and sponsor Victory Park Capital. FinAccel’s existing investors NAVER and Square Peg Capital will also join the bid, contributing $55 million.

The merger is expected to close by the first quarter of 2022.

The other investors on Kredivo’s cap table include Mirae Asset, Jungle Ventures, Singtel Innov8, Telkomsel Indonesia, MDI Ventures, Cathay Innovation, DST Partners, and Kejora Intervest.

Founded in 2016, Kredivo is one of Indonesia’s largest instant credit financing firms with nearly 4 million customers today. It provides financing for e-commerce purchases, offline purchases as well as personal loans. Its users may also access ‘buy now and pay later’ (BNPL) financing at low interest rates, while its merchant partners benefit from instant point-of-sale financing.

According to Kredivo, it currently has an at least 50% share of the BNPL market across major Indonesian e-commerce merchants like Bukalapak and Lazada, and taps on artificial intelligence (AI) to risk-assess its loans to customers. In Indonesia, Kredivo competes with several players including Sequoia-backed digital credit lender Akulaku, peer-to-peer lender UangTeman, as well as online marketplaces and payment startups like Tokopedia, Traveloka, and OVO.

The firm added plans to enter new regional markets in coming months. It expects to launch in Vietnam via a joint venture in Q3 2021, Thailand in Q1 2022 and the Philippines in Q2 2022. Kredivo added that relevant licenses have been acquired in Thailand and the Philippines for its entry.

“…Traditional banks in Southeast Asia have historically provided little consumer credit in our markets, which creates a large opportunity for Kredivo to tap into other credit needs, such as personal loans, and fulfil our vision of providing fast, affordable, and easily accessible credit to tens of millions of customers in the region,” said Akshay Garg, co-founder and CEO of FinAccel.

“Considering that 66% of Southeast Asia’s population is unbanked or under-banked, we also see a very attractive opportunity to serve these customers with other financial services, outside of credit,” added Garg.

Victory Park Capital is no stranger to Kredivo, having previously issued Kredivo two rounds of debt — the first being a $100 million debt facility in November 2020, and an additional $100 million more recently in June.

“Since our initial investment in 2020, we continue to be impressed by Kredivo’s rapid growth and strong credit metrics and unit economics,” said Gordon Watson, co-CEO of VPCB and partner at VPC. “The company has created an impressive platform that enables it to expand into new markets. Its world-class management team has a proven ability to not only execute on its strategy, but also revolutionize fintech across Southeast Asia.”

Kredivo generated $74 million in annual revenue in 2020, while clocking transaction volumes of $574 million in 2020 from 2.2 million cumulative users on its platform. The firm is projecting revenues to more than double to $163 million this year, on the back of rising demand for buy now pay later (BNPL) financing in Indonesia where less than 3 per cent of its 260 million population possesses a credit card.

Goldman Sachs (Singapore) was the financial advisor for Kredivo, while Citigroup was the capital markets advisor to VPCB. Citigroup, Jefferies, and Goldman Sachs (Singapore) also serve as co-placement agents on the PIPE.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.