SUMMARY
Ankush, Bhavish Aggarwal’s brother and founder of Avail Finance, will receive $12 Mn worth of Ola shares
He will further receive cash worth $5.4 Mn as part of the deal
Matrix Partners will get Ola shares and cash worth $13 Mn from the deal
Ankush Aggarwal, the founder of Avail Finance, will make $16.5 Mn in shares and cash from the ola
-Avail Finance deal. Bhavish Aggarwal-led ANI Technologies, the parent company of Ola, is acquiring neobank Avail Finance for $49.6 Mn.
Ankush is the brother of Bhavish.
Ola owned 9% shares in Avail Finance and will now be acquiring the remaining 88.8% stake in the startup.
In a resolution passed by ANI Technologies, its board approved an investment of $49.6 Mn in Goddard Technical Solutions, which operates Avail Finance.
Interestingly, of the $49.6 Mn, around $38.1 Mn (INR 291.1 Cr) will be invested in cash and in shares of Ola. This means, for the acquisition, Ola will allot its shares to the shareholders of Avail Finance, including its founder.
For the share allotment, ANI Technologies has increased its authorised share capital and will allot 1,10,390 Series J3 shares to over two dozen shareholders of Avail Finance.
Avail Finance counts Matrix Partners, AMJ Capital, Kunal Shah, Sachin Bansal, and Alpha Wave Incubation LP among its investors. Shareholders of Avail Finance will receive Ola shares worth $32.7 Mn (INR 249.8 Cr), along with cash worth $5.4 Mn (INR 41.2 Cr)
Ankush will benefit the most from the deal. He owned 804K equity shares in Avail Finance as of March 31, 2021, and will get 40,276 newly created Ola’s Series J3 compulsorily convertible preference shares (CCPS) worth $12 Mn. Apart from this, he will also receive cash worth $4.5 Mn (INR 34.9 Cr). Overall, he will get shares and cash worth $16.5 Mn from the deal.
Matrix Partners, one of the early investors in both Avail Finance and Ola, will receive 42,423 Series J3 CCPS of Ola worth $12.5 Mn, along with $444K in cash, taking the total to $13 Mn.
Ola is acquiring Avail Finance to strengthen its neobank offerings. The startup had earlier said that it will leverage Avail Finance’s products and capabilities to strengthen its lending business and expand into neobanking 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.
Reports suggest that Ankush will be heading Ola’s fintech business after the acquisition.
Founded in 2017 by Ankush and Tushar Mehndiratta, Avail Finance has raised over $38 Mn from external funding till date. The startup offers short-term loans to the blue-collar workforce, including gig workers, in India. As per its website, the neobank offers instant loans to blue-collar workers, starting from INR 5,000, and an advance salary of up to INR 10,000.
Avail Finance competes with several fintech lending tech players, who have mushroomed in recent years, likeslice, Unicard, Early Salary, Lendingkart, MoneyTap, among others.
Note: The exchange rate for INR to USD conversion has been taken as on April 20, 2022.
