Buy now, pay later (BNPL) startup Kredivo’s parent FinAccel is suspending its $430 million initial public offering (IPO) over adverse market conditions, multiple news outlets reported on Tuesday (March 15).
The IPO was announced in August and was set to take place via a $2.5 billion merger deal with special purpose acquisition company (SPAC) VPC Impact Acquisition Holdings II. The decision to halt the IPO was mutual between FinAccel and VPC.
The public offering was intended to fund Kredivo’s global expansion efforts and leverage the BNPL popularity explosion that was triggered by the pandemic. The listing was set for Nasdaq under the ticker VPCB.
“Unfavorable public market conditions and process delays outside of our and Kredivo’s control have affected our transaction timeline and made it infeasible to close the transaction,” Gordon Watson, partner, VPC Impact, told Jakarta Post.
Under the termination agreement, VPC will lead a $145 million private structured investment in Kredivo.
Headquartered in Jakarta, Indonesia, Kredivo is the country’s largest BNPL platform. Founded in 2015, the company also offers personal loans with real-time decisions powered by artificial intelligence (AI). The startup has close to 4 million approved customers and partners with eight of the 10 leading Indonesian eCommerce retailers. The company has expansion plans on the table for Vietnam and Thailand.
While the merger is not currently going forward, FinAccel and VPC are planning to further collaborate and deepen their relationship. At the time of the termination, VPC led a $145 million private structured investment round in Kredivo, Akshay Garg, co-founder and CEO of FinAccel, told Forbes Asia. Kredivo is weighing an offering to other investors in both the SPAC and the PIPE.
“While unfavorable market conditions have put a pause to our plans to go public in the near-term via the proposed business combination with VPCB, we’re pleased to deepen our relationship with VPC and other high-quality investors through a new private funding round,” Garg said in a statement.