Newtap Finance to Raise Rs 550 Crore from Newtap Technologies and CRED

Newtap Finance Private Limited, a non-banking financial company (NBFC), has announced plans to raise Rs 550 crore (approximately $64 million) from Newtap Technologies and CRED. The funding is expected to strengthen the company's lending operations in the near to medium term.

According to a press release from India Ratings and Research, the company has already received significant backing from its promoters, who invested Rs 149 crore during FY22-24. CRED has contributed Rs 35.7 crore in primary infusion to date.

Newtap Finance, formerly known as Parfait, operates in close partnership with CRED, which serves as its loan service provider. Their relationship stems from their shared ownership structure, with CRED founder Kunal Shah's Newtap Technologies holding a majority stake of 76% in Newtap Finance, while CRED owns 23.6%. Shah and CRED acquired control of Newtap in 2022, though the RBI blocked a subsequent attempt by CRED to increase its stake in 2023, leading Newtap to establish itself as an independent NBFC.

By December 2024, the company's loan portfolio had grown significantly, with a total Assets Under Management (AUM) of Rs 1,141.6 crore, of which Rs 632 crore was on Newtap Finance's books. The company has established co-lending partnerships with a major bank and an NBFC and plans to expand these arrangements in the near term.

Newtap Finance leverages CRED's 12-million monthly active user base to offer personal loans to pre-approved users based on their financial behavior. CRED's platform, which offers services ranging from credit card payments to insurance and personal finance management, maintains high lending standards by limiting membership to users with strong credit scores.

CRED's financial performance has shown strong momentum. As of December 2024, its AUM reached Rs 19,000 crore, and the company maintained a low non-performing asset (NPA) ratio of 1.1%. The Tiger Global-backed company reported significant growth in FY24, with operating revenue increasing 66% year over year to Rs 2,473 crore while operating losses were reduced by 41%.