Bengaluru-based digital banking startup Niyo Solutions has acquired mutual funds distribution platform Goalwise in a mix of shares and cash deal. The company did not disclose the exact financial value of the acquisition.
Goalwise had one equity investor who has exited the company through this deal. Goalwise founders have been allocated some shares of Niyo in the process as well.
Through the acquisition, Niyo Solutions will foray into the direct mutual funds business, expanding its bouquet of offerings beyond prepaid cards and savings bank account. The founders of Goalwise will enter the former’s leadership team and bring its 25-member team into Niyo Wealth, which will run as a subsidiary entity within Niyo.
“With this acquisition, we will be pushing on a 0-0-7 strategy, zero forex mark-up cards, 7 percent interest rate on savings account and now zero commission mutual funds,” said Vinay Bagri, chief executive officer, Niyo Solutions, while speaking to Moneycontrol.
Bagri said that both the companies had a business relationship already, and now with this deal, it will be a complete merger.
“We will double the size of our wealth team as well, putting more focus on the business,” he said.
What will start with mutual funds would eventually expand into domestic stocks, international stocks, some self-investment products and others. Overall, Niyo intends to expand into the entire bouquet of financial services for its clients.
Goalwise currently has over 60,000 users with total assets under management of Rs 850 crore. The company primarily catered to salaried millennials belonging to metro cities and a median income of Rs 10 lakh. It offered a goal-based investing solution that oversees all aspects of investment, including mutual fund selection, portfolio rebalancing and target-tracking among others.
Monetisation is an ultimate aim and the company will experiment with different pricing models in its way forward. Bagri pointed out that there is money to be made in this business through product-based fees, roboadvisory, auto investment features and others.
Niyo was started by Vinay Bagri and Virender Bisht back in 2015. Bisht had worked with MakeMyTrip and Mobikwik before starting Niyo with Bagri, who was previously with Standard Chartered Bank and Kotak Mahindra Bank. Niyo is backed by large investors such as Tencent Holdings, Horizons Ventures, Social Capital and Prime Venture Partners.
Niyo started with a travel card in order to make forex management easy for consumers. It issued these cards in partnership with banks. It also forayed into a salaried accounts business for small and medium enterprises, mainly aimed at blue-collar employees. The company also offers savings accounts in partnership with IDFC First Bank.
“Our travel business has been badly affected by the COVID-19 pandemic, but our blue-collar salary account business has come back with a V-shaped recovery,” said Bagri.