Delaware-based venture capital firm Battery Ventures has picked 10% stake in credit information company High Mark Credit Information Services for $1 million (Rs 5 crore), VCCircle has learned. The deal values High Mark at around $10 million (Rs 50 crore).
Credit information companies keep a record of defaults and frauds that help banks and credit card companies to analyse the risk profile of individuals before extending credit.
Currently, High Mark is entirely owned by individuals Anil Pandya (exec chairman) and Anuj Desai with nominal capital. Battery will be the first significant investor in the start-up firm.
Battery Ventures' General Partner Mark Sherman who represents the VC firm's investment in High Mark confirmed that Battery has invested in the Indian company but refused to share details:
"We have made an investment in High Mark and have high hopes for them. We have not disclosed the financial details of our investment." VCCircle learns a formal approval for the foreign investment into High Mark is pending with Indian authorities.
Sherman who joined Battery in the year 2000 focuses primarily on software, technology enabled services and India investments. Besides High Mark, he is currently responsible for Battery's investments in Travelguru and Tejas Networks.
RBI had allowed foreign direct investment upto 49% in credit information companies in November 2008. The policy further prescribes a ceiling of 10% of the total voting rights to a single investor group.
Currently there is only one credit information company in India named Credit Information Bureau India (Cibil) which was originally promoted by SBI (40%), HDFC (40%), Dun & Bradstreet Information Services India (10%) and Trans Union International (10%). Thereafter the company inducted more investors including ICICI Bank, HSBC, StanChart, Citicorp, Bank of Baroda, IOB, Sundaram Finance, Bank of India, GE, UBI and PNB. ICICI Bank, SBI, D&B and Trans Union hold 10% stake each in Cibil. Others own 2.5%-55 each.