Ola set to acquire Avail Finance to double down on financial services
The mobility gianthas reached an agreement to acquire , India’s first neobank that provides financial services to the blue-collared workforce and has over six million users. The company stated the acquisition is a key step in Ola’s broader push into the fintech space as it looks to build a mobility focused financial services business under Ola Financial.
With this acquisition, Ola Financial Services aims to further strengthen its play in the credit underserved segments that comprise blue-collar workers such as Ola’s driver partner ecosystem. The deal is subject to shareholder approval.
The company stated it will be leveraging Avail Finance's products and capabilities, which, in turn, will strengthen Ola’s lending business and help the unicorn expand into neobanking products. Ola says its fintech business will be augmented by Avail Finance’s strong leadership team which has experience in the consumer lending industry, along with a strong technical team across tech, product and design, data science and analytics, among others.
Backing in August 2019, in an interaction with Shradha Sharma, Founder and CEO, YourStory, Ankush Aggarwal, Co-Founder, Avail Finance had told that in an ecosystem where people were building amazing apps for the consumer space, he was using technology to go after a different market.
“I grew up in Ludhiana and like all Indians, have witnessed drivers and household helps asking for salary advances. I moved to Singapore for higher studies and then to the US, where I took a semester off and interned at the Ola auto platform. That was my first first-hand experience with the blue-collar workers, the auto drivers. The major pain-point I saw in the driver community was that their access to capital was a big bottleneck,” said Ankush.
Coming back to 2022, with this expansion Ola will be able to cross sell multiple lending products to its large driver partner base; providing them a one-stop destination for all their financial needs.
Ola recently invested nearly Rs 800 crore into its financial services business that already is showing strong growth across both its lending and insurance verticals. Ola Postpaid, its BNPL (buy now, pay later) offering, is available to 40 million customers and the company says its vehicle financing business is growing rapidly in conjunction with Ola Electric as well as Ola Cars, its used cars business.
With insurance, Ola has built a first-of-its-kind embedded motor insurance product for Ola Electric and Ola Cars, where customers can seamlessly select insurance without having to buy insurance ad-hoc, and avail add-ons like roadside assistance or zero depreciation.
Recently,announced an investment in Israeli battery technology company StoreDot, a pioneer in batteries with extreme fast charging (XFC) technology. The investment marked the first of several global strategic investments planned by Ola Electric as it looks to ramp up its core R&D in advanced cell chemistry and manufacturing, as well as other battery technologies along with new energy systems.
Edited by Kanishk Singh