PayU buys PaySense (ok, majority stake not whole company :))
My beloved (<3) PayU is acquiring a majority equity stake in PaySense, at a valuation of $185 million, with the intention of merging it with Indian consumer lending business LazyPay, PayU announced today (Friday (Jan. 10)).
The Naspers-owned PayU is also planning to invest up to $200 million in equity capital in the combined company, with $65 million being injected now and the rest in the next two years.
“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. This merger is the next step in our journey as we accelerate our vision for credit in India,”
said Siddhartha Jajodia, global head of credit at PayU.
He added that PayU is planning to create a full-stack digital lending platform with the goal of establishing a more expansive FinTech network in the region.
The expertise of the combined entities will be able to better-serve the new-to-credit Indian population.
“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 democratize credit,”
said Prashanth Ranganathan, founder and CEO of PaySense.
India’s banked population has more than doubled to over 80 percent since 2011, however,
“credit bureau coverage is still limited.”
“We continue to witness the massively untapped market potential for short-term collateral-free loans among the digitally savvy aspirational youth,”
said Sayali Karanjkar, co-founder of PaySense.
As a part of the deal, PaySense CEO Prashanth Ranganathan will head PayU’s credit business in India.
Although more people have bank accounts in India than ever before, about 20 percent of India’s population is still unbanked, leaving about 260 million of its 1.3 billion citizens outside the financial system. Fingers crossed that PayU will be solving that issue and in couple of years financial inclusion will be much higher in the region!