Indian fintech startup CRED has struck a deal to buy mutual fund and equity investment platform Kuvera as part of an expansion into wealth management.
The $6.4 billion Bengaluru-based startup said it was attracted by Kuvera’s experienced team and expertise in enabling clients to invest directly in mutual funds and stocks with advisory and tracking tools.
Kuvera, which manages over $1.4 billion in assets for its 300,000 strong user base, has emerged as the platform of choice for many of India’s affluent investors. The average monthly SIP contribution on the platform is INR 5,000 ($60), more than double the industry average, while total mutual investment amounts of over $14,450 are more than 5 times higher than the norm.
Kuvera will continue to operate as a standalone application after the acquisition, CRED said, adding that it will explore integrations in the future. Kuvera’s 50-person team will join CRED as part of the acquisition.
“Through our engagement with CRED we realized that our core values of transparency, user value and simplicity align beautifully with each other,” Kuvera co-founder Gaurav Rastogi said in a statement. “Together with CRED, we see an exciting opportunity to quickly build new products and features for our community while bringing a trusted wealth management solution to millions more.”
TechCrunch reported last year that CRED was in talks to acquire Kuvera. The deal includes cash and stock, the companies said. They declined to share the exact value of the deal. Kuvera had raised about $10 million in private equity rounds before the acquisition. American asset management giant Fidelity will become a shareholder of CRED after the acquisition.
“Excited to welcome Kuvera and their team to the high-trust CRED ecosystem,” CRED founder Kunal Shah said in a statement.
“Kuvera is extremely popular among financially savvy Indians. their products and vision align with CRED’s principle of investing for long-term value creation, not short-term entertainment. We look forward to working and sharing our knowledge with the Kuvera team in our shared intention to enable financial progress.”
CRED’s interest in Kuvera comes at a time when the Indian fintech giant, which serves some of the country’s most affluent clients, is expanding its offerings. The app of the same name originally launched six years ago with the ability to help members pay their credit card bills on time. It has since added many features that incentivize good financial behavior and expanded into e-commerce and lending.
The startup has been looking to expand its wealth management offerings for some time. He held talks with Bangalore-based Smallcase in 2022, but the talks did not lead to an agreement. (CRED has made a series of investments over the past three years, acquiring stakes in LiquiLoans and CredAvenue and buying Happay.)
Mutual funds can be a lucrative category for CRED, which processes a third of all credit card payments in India by volume.
The Indian mutual fund market is one of the largest and fastest growing in the world. According to the Association of Mutual Funds in India (AMFI), the assets under management (AUM) of the Indian mutual fund industry stands at more than $575 billion, up 20% from a year ago. But the majority of people – about 90% of the population – still do not invest in mutual funds and stocks.
