Sqrrl is a mobile-first wealth management platform focused on millennials and Gen Z
CASHe did not disclose the deal value, but the acquisition is primarily funded from its surplus capital
The acquisition will aid in extending CASHe’s reach to the next billion young Indians: Founder chairman
AI-driven financial lending platform CASHe has forayed into the wealth management space with the acquisition of Gurugram-based wealthtech platform Sqrrl in an all-cash deal.
While CASHe did not disclose the deal value, its founder chairman V. Raman Kumar told Inc42 “it’s a substantial deal” that would be primarily funded from the startup’s surplus capital.
The deal comes just a few months after CASHe announced raising INR 140 Cr ($18.7 Mn) in equity funding from Singapore-based holding company, TSLC Pte Ltd, in January this year. The startup said at that time that the funding round took its balance sheet size to INR 800 Cr.
Founded by Kumar in 2016, CASHe is a non-bank, mobile-first, personal loan platform that claims to serve underserved digital customers in the country. It aims to democratise credit access for millennials.
CASHe provides short-term personal loans (unsecured, just like personal loans offered by banks), ranging from INR 7K to 3 Lakh, for a period of 2-12 months. However, instead of using Credit Information Bureau India Ltd (CIBIL) score to measure a prospective borrower’s loan eligibility, the startup has developed its own credit score system called Social Lending Quotient (SLQ).
On the other hand, Sqrrl is a mobile-first wealth management platform focused on millennials and Gen Z. Established in 2017, the startup provides its users with unique offerings to invest and grow their earnings through its different savings and investment products.
Over the past few years, CASHe has been introducing new product offerings in line with increasing consumer demands. The acquisition of Sqrrl marks its entry into the lucrative millennial and Gen Z-focused wealthtech space.
“By integrating CASHe’s millennial-focused credit-led services with the digital-first wealth and investment management offerings of Sqrrl, we aim to seamlessly fulfill the diverse credit and investment needs of the new-age Indian by offering multi-product access and next-gen financial wellness solutions,” said Kumar.
With CASHe’s product offerings now accessible to over 20 Mn users in the country and growing rapidly, this acquisition will aid in extending its reach to the next billion young Indians, he added.
The acquisition further accelerates CASHe’s strategic vision 3.0 of building a full-stack wellness platform for this cohort of the population.
“With its byte-sized investment management capability and its vernacular presence, the combined platforms of CASHe and Sqrrl will meet the growing expectations and preferences of its customers not only in major cities but in tier 2 and 3 towns spearheading the rise of a new and robust young India,” said Joginder Rana, vice chairman and managing director of CASHe.
The CASHe-Sqrrl deal is subject to regulatory approvals.
According to a Research and Markets report, India’s wealthtech investors are expected to grow by about 3X from 2020 to reach about 12 Mn by FY25.
With digital brokerage models growing at a breathtaking pace and having gained significant market share, they are displacing some of the leading traditional brokerage models, said the report. Other players in the investment tech space include — INDMoney, Zerodha, Groww, ETMoney, Paytm Money, Wealthy among others.
Recently, peer-to-peer (P2P) lending startup LenDenClub launched a corporate venture capital fund named LenDenClub Alpha, focused on seed and pre-series stage fintech startups in the lendingtech, wealthtech, neobanks and other allied segments.
On the other hand, India’s overall fintech market opportunity is estimated to increase to $1.3 Tn by 2025, growing at a compound annual growth rate (CAGR) of 31% during 2021-2025. Of this, lending tech is likely to account for 47% share, or about $616 Bn. As per an Inc42 plus report, lending tech startups raised around $1.38 Bn in 2021, more than double of the amount raised in 2020.