Dutch PayTech company PayU has acquired a controlling stake in Indian FinTech startup PaySense. It plans to merge it with its consumer lending business LazyPay.
PayU bought the controlling stake of PaySense and all its assets at a valuation of $185m and will also inject a further $200m into the business. The Dutch company will invest $65m of that equity capital right away and slowly inject the rest over the next two years.
The acquisition will see PayU strengthen its position as an alternative in the Indian lending market, which will represent a $1trn opportunity over the next five years, according to research from the Boston Consulting Group.
“Technology has the power to completely transform people’s access to financial services and the credit market in India is ripe for further digital disruption,” said Siddhartha Jajodia, global head of credit of PayU. “This merger is the next step in our journey as we accelerate our vision for credit in India.”
Prashanth Ranganathan, founder and CEO of PaySense, added, “Providing more Indian consumers with access to credit is crucial to helping individuals grow and succeed. PayU is a natural partner for us as we both strive to make finance more simple, accessible and transparent. We’re excited to start bringing our personal loan product to more consumers throughout India and truly democratise credit.”
Indian FinTech companies have attracted over $16.5bn since 2014, according to FinTech Global’s data.
2017 proved to be a particularly big year for Indian FinTech investment, with investments in the country skyrocketing to $6.8bn that year.
The growth in 2017 was driven by large deals from payments and remittances company Flipkart, which raised over $4bn alone that year across five deals, three of which were valued at $1bn or over.
Payment companies, like PayU, attracted 70% of all capital investment between 2014 and the third quarter of 2019.
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