Altum Credo Secures $40 Million to Expand Affordable Housing Finance

Housing finance company Altum Credo has secured $40 million in its Series C funding round. With participation from British International Investment, as well as current investors Aavishkaar Capital, Amicus Capital, and PS Pai and family, the round was co-led by investment firms Z3 Partners and Oikocredit.

Equity Raise and Investor Exits

The funding round comprised $27 million in fresh equity capital for Altum Credo. Additionally, the company facilitated a partial exit for its Series A investors, who received $13 million. Previously, Altum Credo had raised $9.8 million in Series A funding and $12 million in Series B funding in 2021.

Investing in Growth: Distribution Network and Geographic Expansion

Altum Credo plans to utilize the newly acquired funds to achieve Asset Under Management (AUM) growth. The company will focus on strengthening its distribution network and expanding its operations to new cities. This strategic move aims to increase accessibility for potential homeowners in underserved regions.

Making Homeownership a Reality

Altum Credo plays a crucial role in making homeownership a reality for first-time buyers in India’s semi-urban and rural areas. They offer home loans ranging from Rs 4 lakh to Rs 40 lakh, with loan terms of 5 to 20 years. The company currently boasts an average loan size of Rs 8.5 lakh, with a typical tenure of 15 years. Additionally, Altum Credo maintains a conservative loan-to-value ratio below 50%, resulting in an average property value of approximately Rs 15-25 lakh.

Targeting Underserved Segments

Altum Credo prioritizes serving the unserved and underserved segments of the population. Their primary focus is on assisting first-time homeowners, particularly those belonging to the economically weaker section (EWS) or low-income group (LIG) categories. As of March 2024, a significant 93% of their customer base falls within these categories. The company’s AUM stood at Rs 830 crore (approximately $100 million) at the same time.

Strong Financial Performance

Altum Credo has demonstrated impressive financial growth. According to data platform TheKredible, the company’s operating revenue surged by 102.4% to Rs 67.2 crore in FY23. Furthermore, their profits experienced a significant rise of 99%, reaching Rs 8.95 crore during the same fiscal year. (Financial data for FY24 is not yet available.)

Competitive Landscape

Altum Credo operates in a competitive market alongside other companies like Aviom, Easy Home Finance, Basic Home Loan, and Andromeda, all of which provide financial solutions in the affordable housing sector.

Investor Profile: Z3 Partners

Z3Partners, a venture capital firm leading the funding round, successfully closed their fund at Rs 550 crore in January 2023. Recently, they invested $9 million in the quick-service restaurant chain Wow! Momo.