STARTUP-STORIES

Fibe Secures $90 Million Funding Despite Challenging Market, Aims for Growth

SUMMARY

Pune-based consumer lender Fibe (formerly EarlySalary) secured $90 million in funding despite a tough market for unsecured loan startups. This round highlights Fibe's profitability (Rs 100 crore net income in FY24) and strong financial performance (Rs 1,000 crore revenue in FY24).

Fibe plans to use the funds to raise additional debt and grow its loan portfolio. They offer various loan products (personal loans, credit cards, etc.) with longer tenures and higher average ticket sizes compared to their initial offerings. This strategic shift positions them for future growth.

Fibe, a Pune-based consumer lending platform previously known as EarlySalary, has secured $90 million in a fresh round of funding. This achievement comes amidst a tough market for fintech startups offering unsecured loans.

Total Funding: $90 million, including secondary share sale
Lead Investors: TR Capital ($32 million), Trifecta Capital, and Amara Partners
Existing Investors: TPG Rise Fund, Norwest Venture Partners, Eight Roads Ventures, and Chiratae Ventures
Funding Breakdown: $66 million primary investment, $24 million secondary share sale
Company Valuation: Not officially disclosed by Fibe, but estimated to be over $500 million

Fibe's Financial Performance and Strategy:

Profitability: Fibe emphasizes its profitability, with net income of Rs 100 crore in FY24 compared to Rs 36 crore in FY23.
Revenue Growth: Revenue rose significantly to nearly Rs 1,000 crore in FY24 from Rs 429 crore in FY23.
Product Expansion: Fibe has expanded its offerings beyond small-ticket, short-term loans to include products with longer tenures (6 months to 3 years) and higher average ticket sizes (around Rs 65,000).
Growth Plans: The fresh funding will enable Fibe to raise further debt of around five times from lending partners, aiming to accelerate its AUM (assets under management) growth.

Market Context and Competitive Advantage:

Challenging Market: The RBI's regulations on unsecured lending by banks and NBFCs have made it difficult for many similar startups to raise funds.
Fibe's Differentiation: Fibe highlights its strong corporate governance, good asset quality, and profitable business model as factors that helped them secure funding despite the market conditions.

Fibe's successful funding round demonstrates their resilience in a challenging market. With a focus on profitability, a diversified product portfolio, and plans to expand its loan portfolio, Fibe positions itself for further growth in the Indian consumer lending landscape.