PayU consolidates its LazyPay business with PaySense; will inject $200M in the combined entity
PayU will inject a total of $200 million in the new enterprise in the form of equity capital. At present, $65 million of this amount will be immediately invested, while the balance corpus will be infused in the next 24 months to grow the loan book.
Naspers-backed fintech firm PayU on Friday said that it is merging its consumer lending business LazyPay with Mumbai-based consumer lending startup
.Through this transaction, PayU will acquire a controlling stake in PaySense and all its assets at a $185 million valuation.
In addition to this, PayU will inject a total of $200 million in the new enterprise in the form of equity capital. At present, $65 million of the total amount will be immediately invested, while the balance corpus will be infused in the next 24 months to grow the loan book.
Speaking on the acquisition, Siddhartha Jajodia, Global Head of Credit, PayU, said,
“This merger is the next step in our journey as we accelerate our vision for credit in India. We’re delighted to welcome Prashanth and his experienced team as we integrate this fast-growing business and build a full-stack digital lending platform aligned with PayU’s overall plan of orchestrating a broader fintech ecosystem in the region.”
In a statement, the company also added that its understanding of consumer backgrounds and insights into their purchase behaviour and affluence levels from its payment gateway business, and LazyPay’s deep experience in driving customer acquisition, combined with PaySense’s strong analytics, technology and risk management capabilities will enable the combined entity to serve more of the new-to-credit Indian population.
While Prashanth Ranganathan, Founder and CEO, 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.”
As a part of the deal, Prashanth Ranganathan, currently CEO of PaySense, will lead PayU’s credit business in India and take on the role of the CEO for the new enterprise.
While, Prashanth will continue to retain a stake in the merged enterprise, all other investors and shareholders will exit. PaySense’s management team will also become part of the PayU’s credit team, adding value to the combined business.
“Our endeavour is to facilitate easy digital credit options for this new-to-credit segment and support their ambitions. Both PayU and PaySense believe in leveraging the enormous potential of technology to unlock credit and financial services for vastly underserved consumers in India and this merger reflects our allied vision of delivering financial freedom to all," said Sayali Karanjkar, co-founder, PaySense.
PayU’s unified digital credit platform will also enable third-parties such as banks, NBFCs, and alternate lenders to co-lend and grow assets, and will also enable borrowers to access credit when and where they need it in a digital and seamless way, added the company in a statement.
Anup Gupta, Managing Director of Nexus, who was early investor in PaySense, added,
“It has been a privilege to partner with Prashanth, Sayali, and Team Paysense. They are demonstrating how technology can make an huge impact in Indian financial services landscape. We are also thankful to our co-investors in this journey. In PayU, the company has a solid partner in achieving their vision and we wish them continued success.”
The joint team will combine its complementary assets, capabilities and talented teams with the goal of making access to credit quick, seamless and widely available for the underserved in India and drive higher customer satisfaction.
(Edited by Saheli Sen Gupta)