Digital Banking Startup Freo Acquires Credit Marketplace IndiaLends

Digital banking startup Freo has acquired a 100% stake in credit marketplace IndiaLends to expand its reach.

Freo said the deal, which will be subject to regulatory approvals, will merge its financial products and regulatory licences with IndiaLends’ marketplace capabilities and distribution. They will together operate at scale with complementary business models, full regulatory cover and deep national footprint, it added.

Post the buyout, Freo said it will be able to serve over 5 Cr users. The combined platform will double down focus on stronger products with deep AI interventions to boost profitable growth.

Responding to Inc42’s queries, Freo said that both brands will continue to operate independently.

“India’s digital financial services market is maturing, and relevant consolidation is a natural next step. The platforms that win the next decade will combine the right licences, the right distribution, profitable discipline, and AI embedded across the stack. With IndiaLends, Freo now has all four at scale,” Freo cofounder and CEO Kunal Varma said.

Founded in 2015 by Varma, Anuj Kacker, and Bala Parthasarathy, Freo began operations under the brand MoneyTap. In 2021, the startup evolved into a digital banking platform with the current name, Freo, offering a range of financial products including credit lines, credit cards, credit-on-UPI through RuPay, and savings solutions.

The startup is backed by Peak XV Partners (formerly Sequoia Capital India), Prime Venture Partners and MegaDelta, among others.

On the financial front, Freo narrowed its net loss by 37.9% to ₹8.8 Cr in the year ending March 2025, from ₹14.2 Cr in FY24. Its topline stood at ₹116.77 Cr in FY25, a 4.8% rise from ₹111.46 Cr in the previous year.

Meanwhile, IndiaLends was launched in March 2015 by Gaurav Chopra and Mayank Kachhwaha. It has loan partnerships with over 85 banks and NBFC partners across the country, providing financial products and services such as personal loans, line of credit, credit cards, and gold loans.

It claims to have served more than 2.5 Cr users to date via its app. The startup last raised $5.1 Mn in its Series A funding round from ACP Partners and DSG Consumer Partners in 2021.

Following the acquisition, the combined entity will look at a “large capital raise to enable its next phase of profitable growth”, Freo said.

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