Rupeek Secures Funding of 125 Cr Despite Valuation Drop

Preeti Bali / 6:32 am / June 27, 2024

Online gold credit stage Rupeek has gotten crisp subsidizing of Rs 125 crore (roughly $15 million) in an essential speculation round drove by Height Capital. This denotes the second tranche of subsidizing in the continuous round, following a $6 million speculation from 360 One Huge Asset in May 2024.

Details of the Funding Round

According to regulatory filings accessed from the Registrar of Companies (RoC), Rupeek’s board approved the issuance of 5,801 compulsory convertible preference shares at a price of Rs 2,15,467 each to raise the Rs 125 crore. Industry sources suggest that the total funding round could reach Rs 250 crore.

Potential Additional Investment and Share Dilution

With Rs 175 crore already secured from Elevation Capital and 360 One Large Fund, Rupeek is reportedly in talks with Ranjan Pai’s investment firm, Claypond Capital, for the remaining Rs 75 crore ($9 million). Sources close to the deal suggest that Rupeek’s founder Sumit Maniyar, along with employees and early investor Bertelsmann, might dilute shares worth $8-10 million to facilitate Claypond Capital’s investment.

Company Background and Challenges

Established by Sumit Maniyar and supported by Binny Bansal, Rupeek has raised a sum of $165 million to date. Nonetheless, the organization has confronted difficulties as of late. Information stage TheKredible demonstrates that PeakXV was the biggest outer partner before this subsidizing round, trailed by Accel and Bertelsmann. 360 One Huge Worth Asset held a 2.44% stake preceding their May 2024 venture.

Significant Valuation Decline

Rupeek has struggled to achieve significant growth, leading to a substantial drop in its valuation. The company’s peak valuation stood at $634 million in January 2022, but it has fallen to $250 million in the current funding round, reflecting a 60% decline. Financial news website Entrackr first reported this down-round investment.

Reasons Behind Valuation Drop

The decline in valuation is attributed to Rupeek’s slowing growth. The company’s revenue from operations dropped by 27.6% to Rs 89 crore in the 2022-23 fiscal year, while it incurred losses of Rs 281 crore during the same period. Rupeek’s financial statements for the 2023-24 fiscal year have not yet been filed.

Competitive Landscape

Rupeek faces competition from other gold loan providers such as Oro Money, Ruptok, Yellow Metal, and to a lesser extent, PayU-backed Indiagold.

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