As part of the deal, Prashanth Ranganathan, currently CEO of PaySense, would lead PayU’s credit business in India as the CEO of the new enterprise. He would continue to retain a stake in the merged enterprise, while all the other investors and shareholders will exit.
Online payment service provider PayU on Friday announced that it would acquire a controlling stake in PaySense in an all-cash deal, and merge the financial services start-up with its consumer lending business LazyPay.
After acquiring a controlling stake in Mumbai-based PaySense at a valuation of $185 million, PayU would infuse up to $200 million in the new enterprise in the form of equity capital. Out of this, $65 million of the total amount will be immediately invested, while the rest will be infused in the next 24 months to grow the loan book, a statement said.
As part of the deal, Prashanth Ranganathan, currently CEO of PaySense, would lead PayU’s credit business in India as the CEO of the new enterprise. He would continue to retain a stake in the merged enterprise, while all the other investors and shareholders will exit. Nexus Venture Partners, Jungle Ventures, and Rocketship.vc were the other investors in the company, besides PayU.
“PayU’s 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 and engagement combined with PaySense’s strong analytics, tech and risk management capabilities will enable the combined entity to serve more of the new-to-credit Indian population,” it said. The unified digital credit platform will enable third parties such as banks, NBFCs and alternate lenders to co-lend and grow assets, it added.
PaySense has assets under management worth over Rs 500 crore, and has over 5.5 million registered customers with loan disbursement of over Rs 1,100 crore, the release said.
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.”