The board of Ola has approved for a share swap deal to acquire Avail Finance
Ankush Aggarwal will be heading the Ola Financial post the acquisition
Ola had earlier said that acquisition of Avail Finance is a key step for Ola’s push into fintech space
After two weeks since Bhavish Aggarwal-led Ola announced to acquire neo-bank Avail Finance, the IPO-bound cab-hailing and superapp in the making firm’s board has approved the acquisition of Avail Finance in a share swap deal worth $50 Mn.
According to Ola’s last month statement, 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.
As per a Moneycontrol report, post the acquisition, Ankush Aggarwal, brother of Bhavish Aggarwal, and also the founder of Avail Finance will head Ola Financial.
Ola had said last month that it will leverage Avail Finance’s products and capabilities which will strengthen its lending business and help it expand into neo banking products. Its fintech business will be augmented by Avail Finance’s able leadership team with experience in the consumer lending industry, along with a strong technical team across tech, product and design, data science and analytics amongst others.
To date, Ola was holding 9% stake in Avail Finance as it had invested in the fintech startup in 2019.
Founded in 2017 by Ankush Aggarwal and Tushar Mehndiratta, Avail Finance has to date raised over $38 Mn from external funding. The startup counts investors such as Alpha Wave Incubation and Matrix India Partners. It has to be highlighted that both Matrix and Alpha Wave are also investors in Ola.
It claims to offer short term loans to the blue-collar workforce including gig workers in India. As per its website, the neo-bank offers instant loans to blue collar workers starting from INR 5,000 and an advance salary up to INR 10,000.
Avail Finance at present competes against the likes of several fintech lending tech players who have mushroomed in recent years. Avail Finance pits against slice, unicard, Early Salary, Lendingkart, MoneyTap, among others.
As per the latest Inc42 Plus fintech market report, lendingtech is expected to hold a lionshare of 47.4% in the entire fintech space. In 2021 around $1.5 Bn or 19.5% of the total $7.9 Bn of investment received in the fintech sector was for lending tech startups.