A multi-platform strategy for the debt market
Founded in 2020 by Gaurav Kumar, CredAvenue is India’s largest debt marketplace, with the vision of transforming India’s institutional debt markets through technology. The product stack allows for a high level of interoperability, making CredAvenue a one-stop solution for all debt needs. Harshwardhan Mittal, CTO, claims: “Combining deep technological innovation with expertise in financial product design, our company is one of the only fintech platforms with deep technology integrations across the top 10 banks and mutual funds in India, representing loan assets worth $1 trillion+, that form the core of the financial services establishment in the country. We currently have over 1500+ corporates, 750+ lenders and have facilitated debt volumes of over `650 billion.”
CredAvenue’s major lending partners include SBI, Axis Bank, Kotal Mahindra Bank, Indian Bank, Federal Bank, SBM Bank, Muthoot Fincorp, UGRO Capital, Shriram Transport Finance etc. It has already achieved market leadership across various debt categories, including co-lending, loans, and bonds, by simplifying access as well as servicing and helping consumers seamlessly navigate multiple offerings through a single portal. Mittal reveals: “The next few months will see us invest in data science, machine learning, and artificial intelligence to significantly improve and expand our product offerings across each platform. The platform shall transform from an assisted platform to an utterly self-serve one, improving the speed and autonomy of the platform users.”
PORTFOLIO OF 5 PLATFORMS
CredAvenue has a portfolio of 5 platforms catering to every requirement of both borrowers and investors. Mittal states: “We have CredLoan (loan platform), a term lending and working capital solution for enterprises. CredCoLend (origination platform) is for banks and NBFCs for co-lending partnerships. Plutus (bond platform) is meant for bond issuance and investment for institutional and retail participants. CredSCF (supply chain platform) provides trade financing solutions. CredPool (pool platform) enables end to end securitization and portfolio buyouts. In addition, our company also offers portfolio management and monitoring services as a SaaS offering to our borrowers and lenders.”
CredAvenue is an end-to-end unified digital platform for discovery, trading, execution and fulfilment of all debt solutions and the platform in the world to provide a comprehensive debt product suite to all its borrowers. Mittal says: “We wanted to cover horizontally as much ground as possible to encompass most corporate debt instruments for Indian markets. Hence, we have created 5 distinct sub-platforms.”
ROBUST, LOW FRICTION UX
CredAvenue enables the discoverability of opportunities and possibilities in the institutional lending and borrowing space using advanced technology. Its goal is to transform the debt markets globally, starting with India, by deepening access to capital for the growing enterprise sector to unlock significant economic growth. It does this by doing 3 things. Mittal explains: “First, by creating a transparent marketplace for financial services firms on one side and enterprises on the other side to discover lending and borrowing opportunities. Second, we have developed a robust product suite and credit rating mechanism to enable stakeholders to find an appropriate product-risk fit and last, we have created a robust and low friction UX that not only automates the execution of the transaction but also offers continuous portfolio monitoring.”
CredAvenue may look at existing players that provide it with a ready user base for some of its sub-platforms, thus augmenting the business GTV. Mittal gives hint: “We will be looking to add specific technology capabilities to enhance user experience on the platform and enable better credit and deal discovery & execution capabilities on the platform.”
ACCURATE INFO, DATA ANALYSIS
CredAvenue is a pureplay tech platform that partners with NBFCs, financial institutions, fintechs and businesses to access capital easily. Mittal explains: “We use machine learning, data science and data engineering to ensure the accuracy of the information, data analysis and seamless processing. Our state-of-the-art ML algorithm detects anomalies, thereby preventing fraud, ensuring security and trust.”
The CredAvenue platform acquires the data from publicly available relevant data sources and third parties like credit bureaus, KYC validators, etc. Mittal adds: “We currently receive data from organic and inorganic means through the transactions, user behavior on the platform and the regular data submitted by clients and investors. Data points are then normalized and ingested to provide diverse solutions.”
CredAvenue uses cutting edge tools on the data platform from AWS and open-source ecosystem for data scientists to provide
accurate information. Mittal points out: “The centralized data lake is powered by the AWS lake formation service to ensure all the data points from different data stores are stored and exposed securely for consumption, with all the required access control in place.
WARNING, RECOMMENDATIONS
Today, C red Avenue data analytics algorithms help investors understand the creditworthiness of the loans/transactions/ entities, provide portfolio recommendations, provide early warning and portfolio exposure recommendations. Mittal elaborates: “The loss modeling algorithm on the platform analyses the historical payment data points of 6.5 million loan borrowers to provide expected loss advisory to the investors on the risk front with an extremely high level of accuracy. In addition, it also recommends suitable risk-adjusted pricing basis the market trends and deal pricing on the platform to aid investment decision making on the platform. Our solutions range from descriptive use cases (the client can benchmark against their peer group) to prescriptive use cases (recommendations, loss estimate, investment avenues).”
The platform also helps clients benchmark themselves against their peer groups and the entire market to identify the industry trends, key loss drivers and untapped expansion avenues.
In addition, basis the market and platform data, the profiles of the investor and clients are continuously being updated on the platform. Mittal informs: “A set of recommendation algorithms are then employed to perform matchmaking and suggest suitable personalized clients (investors) for each transaction and will nudge them to move towards suitable customized transactions.”
MLOPS TOOLS
There are also state of the art MLOps tools in place to ensure several machine learning models are taken into production with minimal manual intervention. Mittal explains: “MLOps tools help test the models against each other using various A/B testing frameworks.” Other tools are available in the data platform to provide data catalogue, data discoverability, visualization, and different needs to ensure that the data is made available for consumption at the right time for anyone who needs to consume in a self-service model.”
COMPU VISION, DEEP LEARNING
CredAvenue will be using the funding that it recently raised to deepen its technology and data science infrastructure, and we will also use it for expanding our product offerings. Mittal reveals: “The next few months will see us evolving through cuttingedge technologies like computer vision and deep learning. These technologies will add more depth to the number of insights available for our customers during a deal lifecycle and help counterparties choose their matches in a much more quantifiable manner, with both sides completely aligned to their borrowing and investing criteria.”
CredAvenue also aims to bring as much flexibility and agility as possible in the offering. Mittal adds: “This will lead to complete self-service and seamless connectivity to any external data source for information flow.”
REVENUE TARGETS
The platform has crossed a cumulative GTV of $9.5 billion. Mittal indicates: “It is expected to close the current fiscal at more than $20 billion. This growth will be driven by augmented borrower and lender acquisition as well as improved platform capabilities. Based on the H1 performance, we are tracking $22 mn of revenue for the current year. However, we aim to grow the revenue to Rs5 billion in the next 24 months. We will focus on expanding our team by doubling headcount to 700 by March 2022, while improving our technological capabilities. We also plan to take our fully portable platform to offshore markets, starting with Southeast Asia.”
CredAvenue aims to deepen and power the $120 trillion global enterprise debt market to unlock a GDP multiplier and create massive economic value. Mittal believes: “This will correct the skewed structure wherein top-rated (AA and above) will have access to more than 80% of the debt market. We believe that debt markets are poised for exponential growth.”