Kredivo, a Digital Consumer Credit Platform in SE Asia, to Become Publicly Traded Firm via Merger with VPC Impact Acquisition Holdings II

FinAccel, the parent of Kredivo, an AI-powered digital consumer credit platform based in Southeast Asia, and VPC Impact Acquisition Holdings II (NASDAQ: VPCB), a special purpose acquisition company sponsored by Victory Park Capital, revealed on August 2, 2021 that they have finalized a definitive agreement for a business combination that will “result in FinAccel becoming a publicly traded company with an expected pro forma equity value of approximately $2.5 billion, assuming no redemptions.”

As mentioned in a release shared with CI:

“Kredivo provides customers instant credit financing for e-commerce and offline purchases, as well as personal loans, based on proprietary, AI-enabled real-time decisioning. With nearly 4 million approved customers today and a presence across eight of the top 10 e-commerce merchants in Indonesia, it is the largest and fastest growing buy now, pay later (BNPL) platform in Indonesia today, with plans to expand into regional markets such as Vietnam and Thailand in the near future.”

The announcement further noted that Kredivo serves a “target segment” that comprises the fast-growing middle class citizens of Indonesia, with interest rates that are among the lowest in the Southeast Asian nation, and an application and approval process that “takes as little as two minutes.”

Kredivo has an established track record of being a “superior” solution for online and offline merchants, the release noted while adding that with less than 10% of the middle class in Indonesia in possession of a credit card, merchants partner with Kredivo “to help increase customer spend.”

As stated in the announcement, surveyed merchants that team up with Kredivo experience “more than double the average basket size,” up to 3x more frequent transactions, and more than 50% of these merchants have said that Kredivo helps “increase cart conversion rate during checkout.”

Akshay Garg, Co-Founder and CEO of FinAccel, stated:

“As the top buy now, pay later platform in Indonesia, Kredivo is an established force in the large and rapidly growing point of sale financing market. Unlike Western markets where credit is readily accessible, 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 fulfill our vision of providing fast, affordable, and easily accessible credit to tens of millions of customers in the region.”

Akshay added:

“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. We are proud to have the continued support of our longstanding investors in our pursuit to realize our long-term vision and growth strategy.”

Victory Park Capital, an international investment company based in Chicago, has an established track record of “executing debt and equity financing transactions with some of the largest, most innovative global fintech companies.”

The announcement also mentioned tha tVPC and Kredivo have “a long-standing relationship, with VPC providing an initial $100 million credit facility to the company in July 2020 and upsizing it to $200 million in June 2021.”

In addition, VPC and its limited partners have invested around $30 million into the PIPE and are “committed to a two-year lockup on their sponsor shares, unless otherwise accelerated based on average trading performance measures beginning one-year following the closing. VPCB completed its initial public offering in March 2021.”

Gordon Watson, Co-CEO of VPCB and Partner at VPC, remarked:

“Since our initial investment in 2020, we continue to be impressed by Kredivo’s rapid growth and strong credit metrics and unit economics. 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.”

FinAccel has been backed by prominent investors such as Square Peg, Mirae Asset, NAVER, Jungle Ventures, GMO Internet, and Telkom Indonesia.

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