#044 Mastering Our Own Destiny: The Journey of investing in Credit Nirvana

At Cornerstone Ventures, we believe in being 'end-game partners' to all our founders. We don’t just invest; we commit to seeing our companies through their full journey—through highs and lows, challenges and triumphs. Our approach is centered on conviction-driven investing, where we back founders not just with capital, but with strategic partnerships, resilience, and unwavering belief.

We invest solely on our own conviction and not borrowed conviction - which a few other funds do where they like to follow other investors. Investing is not about following trends or waiting for external validation—it’s about believing in a company’s potential and backing it through every twist and turn. Our journey with Credit Nirvana is a testament to that philosophy.

Backing Vision from Day Zero

In 2020, we invested our first tranche in Credit Nirvana. The Company had just started commercializing its product, but we recognized the strength of its offering and the opportunity to disrupt the market, to build something transformative. Our belief was simple: this was a business with the power to redefine debt management for lenders, and we wanted to be there from the grounds up.

No sooner had we invested than the world was hit by COVID-19. The Banking and NBFC companies— the company’s primary customers – struggled significantly with debt collection due to lockdown restrictions. Collections became even more critical and digital adoption accelerated. Our conviction didn’t waver in the face of uncertainty. We doubled down, investing additional capital through 2021 and 2022, ensuring the Company had the runway to navigate turbulent times.

Weathering the Storm & Rewarding Resilience

During the pandemic, we didn’t just provide capital; we helped the company steer through adversity. As the industry rebounded, the Company demonstrated exceptional grit and growth. The antifragility of the business and the founders was evident. Seeing this, we further backed them at significantly higher valuations, ensuring that their perseverance was duly rewarded.

But the challenges didn’t stop there. One of the competitors raised millions of dollars, aggressively undercutting the market and making customer acquisition an uphill battle. At the same time, one of the Company’s co-founders had to step away due to personal reasons, forcing the company to reorganize its leadership in a critical growth phase.

Despite these setbacks, the team remained steadfast. We worked closely with them to refine their go-to-market strategy, strengthen their product differentiation, and ensure that the Company emerged stronger from these challenges.

Then, in 2023, the company attracted two inbound offers—one from a Venture Capital fund and another from a prominent Indian Fintech for a strategic acquisition. Both parties were aware of each other’s interest, and we faced a crucial decision.

Making the Hard Calls

The Fintech acquirer promised significant synergies, and despite their offer being lower than that of the VC fund, we chose to move forward with them. We saw long-term strategic value in their integration. However, what followed was a harsh lesson in transactional realities.

While the acquirer conducted due diligence, they continuously revisited terms based on factors they had known from day one. Meanwhile, we had turned down term sheets from financial investors in anticipation of this strategic deal. As time passed, it became evident that their delays were a deliberate strategy to weaken the company’s position—dragging the process on to the point where the Company would be left with no capital, no options, and would have to accept an undervalued exit.

When we uncovered (through reliable intelligence) that the acquirer itself lacked the necessary cash to complete the transaction, we acted decisively. We pulled out of the deal immediately. We did not flinch in our commitment to the Company — we stepped in with additional capital, ensuring their stability without any valuation erosion.

Building a Self-Sustaining Business

Our unwavering focus remained on making the Company self-sustaining without compromising growth. By early 2024, the company was on the verge of cashflow breakeven while still growing at over 100% YoY.

While we had not planned for further investment, we carved out additional capital to enable the company to turn cash-positive and continue scaling through internal accruals. This is what true end-game partnerships look like.

Finding the Right Home

In the second half of 2024, we engaged with Perfios for a potential acquisition. From the outset, their approach stood out. Unlike our previous experience, they moved with clarity, transparency, and speed.

They operated with integrity, demonstrating that business ethics and execution discipline can go hand in hand. While it took time to close the transaction, but not once did they falter in their intent or actions. It was a stark contrast to our prior experience and a testament to what great partnerships should look like.

The Lesson: Mastering Our Own Destiny

Through this journey—from investing in Credit Nirvana’s early days to witnessing its successful acquisition—we reaffirmed a crucial belief: as investors, we must be the architects of our own conviction.

We do not rely on external investors or secondary validation to move a company forward. If we invest in a business, we do so with the mindset of being their end-game partner, supporting them through every stage of the journey based on our independent thesis. We do not operate on borrowed conviction.

This is precisely why we lead investments in most of our companies—because real venture building is not about waiting for the market’s approval. It’s about seeing potential early, backing it through adversity, and ensuring that every company we partner with has the support it needs to define its own future.

Credit Nirvana’s journey was one of resilience, strategic foresight, and, above all, the power of long-term conviction. And that is exactly the kind of story we love being a part of.

~ Vatsal Bavishi

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