Global online payment service provider PayU announced on Friday it is merging consumer lending business LazyPay and digital credit platform PaySense to build a full-stack digital lending platform in India. PayU reported it will acquire a controlling stake in PaySense and all its assets at a valuation of $185 million. PayU will also inject a total of up to $200 million in the new enterprise in the form of equity capital; $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. The company further explained:
“The combination will bring together two highly complementary companies, each with an excellent reputation in the alternative lending space. 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 & risk management capabilities will enable the combined entity to serve more of the new-to-credit Indian population.”
Speaking about the merger, Siddhartha Jajodia, Global Head of Credit, PayU stated:
“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’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.”
Prashanth Ranganathan, Founder and CEO, PaySense, also commented:
“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.”
PayU then added as a part of the deal, Ranganathan will lead PayU’s credit business in India as the CEO of the new enterprise.