IPO-bound Fibe turns to merchant-led loans to reduce reliance on costly digital customer acquisition

As per the latest business developments, IPO-bound digital lender Fibe is increasingly sourcing borrowers through hospitals, educational institutions, insurers and other merchants, as it seeks to reduce its reliance on the costly digital acquisition of personal-loan customers, sources told Moneycontrol.

Social Worth Technologies, which operates Fibe, filed its draft red herring prospectus with the Securities and Exchange Board of India on June 29. The proposed IPO comprises a fresh offering of shares worth up to Rs 750 crore and an offer for sale of up to 4.01 crore shares by market participants, including TPG-backed The Climb Fund III, Norwest Capital, Eight Roads Ventures and Piramal Finance. The total IPO size is likely to be around Rs 2,000 crore, the sources stated.

Assets under management (AUM) in what Fibe calls its “purpose-fuelled financing” business more than tripled to Rs 1,946 crore in FY26 from Rs 581 crore in FY24, representing a compound annual expansion rate of 83 percent, the draft documents show.

Its share of Fibe’s total AUM increased to 22.6 percent from 14.3 percent over the period, though personal loans continued to account for more than three-fourths of the loan book.

The so-called purpose-fuelled financing are loans that customers avail for specific end use cases like education or medical expenses.

Unlike personal loans, where customers are typically acquired through digital advertising, bureau-based targeting or existing relationships, purpose-fuelled loans are offered at the point of a transaction. Fibe provides financing for hospital treatments, education fees, health insurance premiums, rooftop solar installations, travel and e-commerce purchases through its merchant network.

The network expanded to 10,387 merchant touchpoints in FY26 from 3,294 in FY24. Annual disbursements through the segment rose to Rs 3,036 crore from Rs 953 crore, while its share of fresh disbursements increased to 36 percent from 26 percent. Since rolling out the business in 2021, Fibe has disbursed more than Rs 6,605 crore to 1.24 million customers.

Fibe’s platform processed approximately 1.31 million loan applications a month, with 95 percent of loans decided through automated processing in FY26. Its credit scorecards use more than 27,500 variables, including bureau, income, demographic, device and behavioural information.

Fibe’s total AUM increased to Rs 8,603 crore in FY26 from Rs 4,064 crore in FY24, while earnings after tax rose to Rs 291 crore from Rs 101 crore.