Veefin Acquires 26% Stake In Fintech Services Provider EpikInDiFi Via A Share Swap Deal

Marking its third acquisition in three months, BSE SME-listed fintech startup Veefin Solutions has acquired a 26% stake in EpikInDiFi in a share swap deal which valued the latter at INR 125 Cr.

Veefin will increase its stake in EpikInDiFi to 100% in the next two years in phases, cofounder and COO Gautam Udani told Inc42.

As part of the deal, EpikInDiFi founders Rajendra Awasthi, Sushmitshri Babu, and Vaidyanathan Balasubramaniam will acquire stakes in a subsidiary of Veefin. However, Udani didn’t disclose the amount of stake or the name of the subsidiary in which the founders will acquire stakes. Besides, Veefin plans to invest INR 25 Cr in EpikInDiFi over the next two years.

Founded in 2017, EpikInDiFi provides cloud-based fintech automation solutions to banks and financial institutions. It claims that its analytics-driven solutions like Business.ezee, Identity.ezee, Lend.ezee and Collect.ezee help the institutions streamline their processes, take smarter decisions, improve operational efficiency, and reduce NPAs.

EpikInDiFi’s acquisition will help Veefin add new revenue streams by strengthening its presence in personal loans, buy now & pay later, green loans, credit cards, mortgage loans and SME loans segments. Veefin claims to have a strong presence in the working capital solutions segment.

Udani also said that one of the reasons behind the acquisition is that he rates EpikInDiFi’s product stack a little higher than Veefin’s loan origination system (LOS), adding that it could have become a competitor for Veefin in the near future. 

The acquisition will add 50 banks and NBFCs to Veefin’s kitty. This will allow Veefin to cross-sell products of its other subsidiaries to EpikInDiFi’s clients. 

“This has been a seminal year for the Veefin Group in building both in-house capabilities as well as leveraging inorganic growth opportunities to expand beyond supply chain finance and offer every single solution under the ambit of working capital finance to our Indian and global customers,” Udani said. 

It is pertinent to note that in June, Veefin acquired a 26% stake in Regime Tax Solutions, a company that works with advanced GST compliance, accounts payable (AP) and accounts receivable (AR) automation.

Later in August, it acquired global IT services provider Nityo Infotech Singapore’s Indian arm for an undisclosed amount. 

In a statement, Veefin said that the total expected outlay of the first tranche of all three acquisitions in the last three months is INR 215 Cr (through cash and equity).  

Founded in 2020, Veefin provides white-labelled supply chain finance and lending solutions for banks and NBFCs, including end-to-end lending stack, smart credit decisioning, business intelligence, digital identity verification, automated financial statement analysis, debt securitisation, cash management, trade finance, automated accounts receivable and accounts payable and software consulting. 

It counts the likes of Yes Bank, Jio Financial Services, IndusInd Bank, Hero FinCorp, among others, as its customers. In its annual report for the financial year 2023-24 (FY24), the startup said that its strategic priorities for the next year include acquiring companies with complementary products in the transaction banking and digital lending space. 

Veefin’s profit after tax zoomed 49% to INR 5.63 Cr in FY24 from INR 3.78 Cr in the previous fiscal year. Revenue from operations rose 72% to INR 24.99 Cr from INR 14.48 Cr in FY23. 

Veefin got listed on the BSE SME platform in July last year at a share price of INR 82. Its shares ended Monday’s (September 16) trading session 2.8% lower at INR 682.55.