HDFC Banks Divest 3.21% Stake In Fintech SaaS Startup Lentra

Banking major HDFC Bank on Saturday (November 11) announced that it was trimming nearly 3.21% of its stake in fintech SaaS startup Lentra, pegged at more than INR 54 Cr.

The transaction is expected to be completed by the end of December 2022. As part of the deal, the bank has sold 73,941 equity shares of the Pune-based startup at a price of INR 7,326 apiece. 

“We wish to inform you that HDFC Bank has executed an agreement on November 11, 2022 to sell 73,941 equity shares held by the Bank in Lentra AI at a price of Rs. 7,326/- per equity share for a total sale consideration of Rs. 54,16,91,766/-,” said HDFC Bank in a regulatory filing. 

This would be a partial divestment of the HDFC Bank’s stake in the startup. Post the completion of the transaction, the HDFC Bank’s shareholding in Lentra would stand at 6.61% on a fully diluted basis.

In its filing, the Bank also noted that the sale of the shares did not constitute a related party transaction. It further added that HDFC Investments continues to be a shareholder of Lentra and the transaction has been conducted on an arms’ length basis.

Founded in 2018  by D Venkatesh and Ankur Handa, Lentra offers a cloud-native full-stack platform that helps banks automate the entire lending life cycle from loan origination to loan management.

So far, HDFC Bank has invested in the startup in two tranches. First, it participated in an INR 77 Cr fundraise that saw participation from Bessemer Venture Partners, back in 2019. Later, in the year, it pumped another INR 7 Cr in the SaaS platform. 

Lentra claims to serve more than 50 clients, offering its cloud services to more than 40 banks. The startup claims to have processed more 13 Bn transactions worth $21 Bn worth of loans on its platform so far. 

The Pune-based platform’s clients include banks such as HDFC, Standard Chartered Bank, IDFC and Federal Bank as well as non-banking financial companies (NBFCs) such as TVS Credit Services, Tata Capital and Aditya Birla Finance.

The startup reported a revenue of INR 27.89 Cr in FY20 and INR 44.72 Cr in FY21. Subsequently, Lentra posted a revenue of INR 71.53 Cr in FY22, against a loss of INR 51.99 Cr. 

The announcement comes at a time when the fintech SaaS space is witnessing renewed interest as banks and other financial institutions look to modernise their services and embed new offerings in their product suite.

According to Inc42, Indian fintech SaaS startups have raised more than $868 Mn between 2014 and the third quarter of 2022.