Pune-based fintech startup EarlySalary has acquired CashCare, a consumer lending platform where short-term loans are provided on a real-time basis for an undisclosed amount.
With this acquisition, EarlySalary has introduced a new feature of ‘Checkout Finance’ with the intent of allowing its users to shop now and pay later. As part of the acquisition, Vikas Sekhri, the CEO of CashCare will be the Head of Strategy at EarlySalary, and Suraj Mundada, the CTO of CashCare will be the Chief Architect.
Commenting on the acquisition, Akshay Mehrotra, founder of EarlySalary, told ET “We have paid a small amount for the platform; the rest we are getting the tech team of CashCare to join our company, which is the biggest positive of this move. We also get all the merchant partners of CashCare with us through the acquisition, which will help us scale up the product fast.”
In a media statement, Akshay shared that with the launch of this new feature ‘Checkout Finance’, the startup is aiming to offer its customers the convenience to shop now and pay later.
On the development, Vikas Sekhri, Founder, CashCare Technology said, “With this synergy, we will be able to further develop our services for the young, working population in our country. Together, we can build a wide-ranging credit solution for online platforms, while making the consumer’s experience as easy as swiping a card.”
Founded in 2015 by Akshay Mehrotra and Ashish Goyal, EarlySalary is a mobile-first lending platform. It provides salary advances and instant cash loans based on a smart risk scoring system. These loans are similar to salary/cash advances or credit card cash withdrawal.
The fintech startup provides salary advances up to 50% of one’s monthly salary to its users. The company claimed that 70% loans are given in under 10 minutes. Apart from this, salary advance/cash loans are transferred to one’s bank account instantly.
Till date, the startup has raised $22.1 Mn with the latest being $15.7 Mn (INR 100 Cr) in Series B funding led by Eight Roads Ventures India in January 2018.
The startup is also planning to expand into consumer financing business with this deal.
Further, CashCare enables its users to make online purchases through their partner merchants into instant EMIs even without a credit card.
After the deal, EarlySalary will partner with CashCare merchants like ShopClues, Jabong, Byju’s, among others. The startup currently has operations in 15 cities including Mumbai, Pune, Chennai, Bengaluru, Hyderabad, New Delhi, Jaipur, and Ahmedabad.
At present, EarlySalary claims to process around 30K loans per month at an annual disbursal run rate of $88.24 Mn (INR 600 Cr). The company is targeting to reach one lakh disbursals within the next 12 months and an annual run rate of $882.49 Mn (INR 6,000 Cr).
Akshay had earlier told Inc42 that EarlySalary was also gaining traction in tier II and tier III cities across the country such as Mysuru.
In the fintech space, recently Mumbai-based B2B payments company PayMate acquired micro-lending institution Zaitech Technology Pvt Ltd (Z2P) with the aim of speeding up credit applications and the credit decision-making process for small-medium enterprises (SMEs).
Prior to this, Sequoia and Mayfield-backed Knowlarity Communications acquired cloud telephony startup Sunoray Solution to leverage the technological needs of the SMEs.
The startup offers SMEs tech-based products such as telecalling software, cloud-based communication apps, and virtual receptionist, among others, to cater to diverse business needs.
According to Inc42 DataLabs Indian Startup Funding report 2017, the Indian fintech industry has received $3.01 Bn across 111 deals in 2017. And the sector continued to lead its growth, as according to the Indian Tech Startup Funding Q1 2018 report, fintech witnessed the highest funding.
A report by NASSCOM further forecast that the Indian fintech software market will touch $2.4 Bn by 2020 from the current $1.2 Bn. With the acquisition of CashCare, EarlySalary has got a huge push and new customers to scale up its operations.