Housing Finance Startup Altum Credo Raises $40 Mn To Scale Up Distribution Network

Housing finance startup Altum Credo has raised around $40 Mn (INR 334 Cr) in its Series C funding round co-led by Z3Partners and Oikocredit, with participation from British International Investment and other existing investors, including Aavishkaar Capital and Amicus Capital.

The company said that it has raised $27 Mn in equity and facilitated a partial exit to Series A investors of $13 Mn. 

Altum Credo plans to use the fresh funds to achieve AUM growth by further enhancing its distribution network and expanding its operational footprint. The round will also help the company to remain well-capitalised in the near term and support growth, it said.

Founded in 2017, Altum Credo has been enabling tech-driven affordable housing finance in the country. It is focused on the largely untapped potential of unserved and under-served segments and targets first-time homeowners. 

The company raised $9.8 Mn in its Series A funding round and $12 Mn in Series B equity funding in 2018 and 2021, respectively. 

As of March 2024, Altum Credo had an AUM of INR 830 Cr, with 93% of customers from the economically weaker section or low-income group category. Its customer base comprises salaried customers from both formal and informal segments and self-employed proprietors of small and medium enterprises who largely belong to low-income groups. 

The average ticket size of its home loan portfolio is INR 8.5 Lakh, with an average tenure of 15 years. With a loan-to-value ratio below 50%, the average value of the properties the company funded is around INR 15-25 Lakh.

Vikrant Bhagwat, founder, MD and CEO of Altum Credo, said that at a time when the Indian economy is touching new heights, access to affordable housing finance has immense potential to contribute towards this growth.

“This Series C fund raise is a critical milestone for the next phase of sustainable growth and will strengthen our balance sheet enabling effective leverage and sound ALM (asset and liability management). The company will enhance its distribution network and expand operations in central and northern India,” said Bhagwat.

Altum Credo currently operates in semi-urban and outskirts of urban areas in six states –  Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, and Rajasthan.

“We believe the company is at an inflection point where physical and digital infrastructure comes together to provide industry-leading operational metrics,” said Rishi Maheshwari, managing partner at Z3Partners. 

“This investment fits into our core thesis of technology being a catalyst to financially empower the underserved segment of Bharat, while also building businesses in a profitable and scalable manner.”

As per a recent CareEdge Ratings report, affordable housing finance companies saw a resurgence in growth during FY23, expanding by 27% year-on-year. It is expected to further grow by 29% in FY24 and 30% in FY25.