PayU’s consumer lending platform LazyPay and PaySense are planning to merge their business operations to build a unified digital lending platform in India. PayU will invest a total of up to $200 million in the form of equity capital in the new establishment.
Of the investment, $65 million will be immediately injected into the enterprise and the remaining amount in the next 24 months. PayU acquired PaySense for an equity valuation of $185 million in an all cash deal.
The merger is in line with PayU’s long-term vision of reinforcing its fintech presence in the country. The company has an in-depth understanding of consumers purchase behaviour and their backgrounds.
In the big picture, PayU’s new platform will allow third parties including banks, non-banking financial companies (NBFCs) and alternate lenders to co-lend and multiply assets. Also it will enable borrowers to gain easy credit access.
PaySense’s current CEO Prashanth Ranganathan will retain a stake in the merged enterprise, however. Other investors and shareholders will make an exit. Both PaySense and LazyPay’s seasoned experts will combine their assets, capabilities and talent to ensure quick credit for the underserved population in the country.
Siddhartha Jajodia, Global Head of Credit at PayU, said in a press release “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. We integrate will 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.”
The new enterprise will combine LazyPay’s experience in driving consumer engagement and PaySense’s analytics, technology and risk management capabilities. PaySense Founder and CEO Prashanth Ranganathan said “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.”