Fintech firm KreditBee is in the process of relocating its headquarters from Singapore to India, according to sources familiar with the matter as reported by Entrackr. This shift aligns with a trend among fintech companies, many of which are transitioning their base from Singapore or the US, particularly Delaware, to India.
Sources suggest that fintech companies like KreditBee are choosing to establish headquarters in India due to the maturation of the local ecosystem, including the development of public markets in recent years. Additionally, regulators prefer fintech firms to operate from within the country, as it facilitates easier diligence and monitoring.
KreditBee is currently registered as Finnove Private Limited in Singapore, with over 70% ownership in the Indian entity of the lending firm.
The company has reportedly been formulating its relocation plan for several months, seeking input from regulators and assessing tax obligations.
Another potential advantage for companies relocating to India is the opportunity to benefit from the rising valuations offered by domestic public markets to technology firms.
KreditBee has chosen not to comment on these developments.
In addition to KreditBee, other companies such as Pine Labs, Groww, Razorpay, Meesho, and Zepto are also undergoing similar reverse flips. PhonePe, owned by Walmart, was among the first to relocate its headquarters to India, with its investors paying significant taxes to the government as a result.
The amount of tax incurred depends on the company’s valuation and third-party audits.
KreditBee was valued at approximately $700 million during its latest funding round in March and is poised to potentially become a unicorn in the next round of funding. The company has raised over $400 million to date.
Sources indicate that the decision to relocate will also facilitate KreditBee’s path to an IPO. While the company is not in a hurry, its founder and CEO, Madhusudan Ekambaram, anticipates a public listing by 2027.
Established six years ago, KreditBee offers loans up to Rs 4 lakh with a repayment tenure ranging from 2 to 15 months and interest rates of up to 2.49%. According to startup data intelligence platform TheKredible, Premji Invest is the largest external stakeholder with a 23.44% stake, followed by Newquest Asia and Alpine Capital.
In FY23, KreditBee reported a profit of Rs 64.33 crore, with revenue from operations reaching Rs 788.66 crore. The company also claimed a profit after tax of Rs 95 crore in the first half of FY24 and expects to close the last fiscal year with a profit of Rs 250-260 crore.
KreditBee faces competition from MoneyTap, Fibe (formerly EarlySalary), LazyPay, and Navi, among others.
While the decision to return to India is driven by policy and market factors, it presents challenges, particularly concerning back taxes. This may necessitate funding support for KreditBee, despite its profitability, potentially impacting valuations and ownership stakes. Resolving these financial aspects will likely require considerable attention from the company, as it aims to maintain focus on its core business. Investors will play a crucial role in supporting a smooth transition and resolution of these financial considerations.
