Concurrent Acquisition of Existing Shares, Valuation Nears 300 Billion KRW
Three Consecutive Years of Profitability... Accelerating Toward Next Year's IPO
Upfin, a fintech company (formerly Balancehero) offering microloan services in the Indian market, has successfully secured funding ahead of its planned IPO. Industry observers note that the company’s recent rapid growth in performance accelerated investment decisions by venture capital (VC) firms.
According to the investment banking (IB) industry on December 22, Upfin will complete a pre-IPO (pre-listing equity investment) round worth 30 billion KRW by the end of this month. This comes just four months after it began fundraising in August. Major VC firms such as Mirae Asset Venture Investment, Smilegate Investment, and Kolon Investment participated in this round.
The investment is structured as a combination of new share issuance and acquisition of existing shares. Part of the funds will be used to purchase shares from existing shareholders. Investors have valued Upfin at between the mid-200 billion KRW range and up to 300 billion KRW. This surpasses the 220 billion KRW valuation recognized during its convertible bond (CB) issuance last year. With this round, Upfin's cumulative investment is expected to reach the mid-100 billion KRW range.
The main reason behind this successful fundraising is cited as the company’s improving financial indicators over the past few years. Founded in 2014, Upfin turned profitable in 2022 with an operating profit of 10.7 billion KRW, followed by 16 billion KRW in 2023, and 35.5 billion KRW last year-a 122% increase from the previous year. Over the past five years, revenue has nearly doubled each year. Industry insiders believe that Upfin’s demonstrated ability to generate actual cash flow was a key factor in the investment decision.
From a business model perspective, the company’s credit evaluation method tailored to the characteristics of the Indian market has been identified as a driving force. Upfin provides financial services to low-credit individuals with limited credit history in India through its proprietary artificial intelligence (AI) and data-based Alternative Credit Scoring (ACS) system. By analyzing a wide range of payment and transaction data, including SMS messages, the company calculates credit scores with precision, enabling low-credit individuals to quickly and easily access microloans. As a result, the company has lowered the barrier to entry for loans, with cumulative loan disbursements now exceeding 1 trillion KRW, steadily increasing its market share in India.
An IB industry insider commented, "The company was highly regarded for overcoming concerns about the risks of overseas financial operations through its performance," adding, "Having proven both its growth potential and profitability, Upfin is expected to gain significant momentum during its listing process."
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