Bro Code? Bhavish Agarwal’s Ola To Acquire His Brother’s Financial Services’ Startup Avail Finance

IPO-bound ride-hailing startup Ola has inked an agreement to acquire neo-bank Avail Finance. However, the deal is yet to be approved by stakeholders. 

According to Ola’s 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. 

With this acquisition, Ola Financial Services will further strengthen its play in the credit underserved segments that comprises blue collar workers such as Ola’s driver-partner ecosystem. Ola said it will leverage Avail Finance’s products and capabilities which will strengthen it’s 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. 

With this expansion, Ola will be able to cross sell multiple lending products to its large driver partner base; providing them a one stop destination for all their financial needs.

Ola currently holds 9% stake in Avail Finance. It had initially invested in the neo-bank startup in 2019. 

Founded in 2017 by Ankush Aggarwal and Tushar Mehndiratta, Avail Finance offers 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.

It is to be noted that Ankush Aggarwal is the brother of Ola’s cofounder Bhavish Aggaral. Both the brothers are presently directors of Avail Finance. 

Avail Finance has raised $38.3 Mn to date. It was earlier in discussions to acquire neo-banking platform YeLo. 

In 2020, the fintech startup Avail Finance raised $11.8 Mn in Series B funding round led by the US-based Falcon Edge India-managed Alphawave Incubation at a valuation of $68.1 Mn. Its existing investor Matrix Partners had also participated in this round.

Ola’s Plans To Expand Financial Arm 

Reportedly, cab aggregator Ola has been planning to expand its financial services product and was considering getting a non-banking finance company (NBFC) license.

In 2020, Ola infused about INR 800 Cr into its financial services business. It further claims to have 40 Mn customers for its financial product Ola Postpaid. It also asserts that its vehicle financing business is growing rapidly in conjunction with Ola Electric as well as Ola Cars. 

Following the launch of its electric scooter, the startup also entered the vehicle financing business with NBFC partnerships. 

Founded in 2010 by Bhavish Aggarwal and Ankit Bhati, Ola offers mobility solutions to customers. On its website, the cab aggregator claims to have more than 1.5 Mn driver-partners. 

In addition to that, the cab aggregator operates various businesses including electric vehicle arm–Ola Electric, fleet management business–Ola Fleet Technologies, financial product services arm–Ola Financial Services, and food business arm–Ola Foods. 

Recently, in January 2022, Ola raised close to $20 Mn from Hong Kong-based Segantii Capital. According to the Inc42 report, ANI Technologies which operates Ola, is further extending its J1 series, by adding Segantti Capital to the round. The startup, which is almost trying to enter the Super-app race, is allotting a total of 66,269 Series J1 CCPS to Segantii India (Mauritius). 

In December 2021, Ola raised $149 Mn in funding round from Edelweiss, IIFL, Hero Enterprise among others. Back then, the parent of Ola Cabs had allotted 4,63,471 Series J1 CCPS at a premium price of INR 22,625