Fintech infrastructure provider M2P Fintech has acquired Hyderabad-based digital identity validation startup Syntizen in a bid to add Know Your Customer (KYC) services for its customers, the company said on July 19.
With the acquisition of Syntizen, which provides electronic Aadhaar-based customer onboarding solutions for companies, M2P Fintech will be able to offer fully integrated technology services to companies looking to deploy fintech products.
While the company did not disclose the amount of the acquisition, Moneycontrol learns that the deal was a mix of cash and stock, valued at around $10-12 million. Some of Syntizen’s previous investors, whose stakes were bought out by M2P Fintech, include card network Mastercard and biometrics solution provider ACPL.
M2P Fintech’s tech stack was offering credit card and prepaid card stacks for its customers including banks like ICICI Bank, State Bank of Mauritius (SBM) India, Yes Bank, Bank of Baroda, etc. The company’s customers also include fintech startups Slice, Razorpay, Open, etc.
In a conversation with Moneycontrol post the announcement, M2P Fintech’s co-founder and CEO Madhusudanan R said, “With this acquisition, we can now offer a KYC stack to our customers. Additionally, Syntizen over the years has done a lot of work around Aadhar enabled services and the KYC platform, and governments use its stack for benefit disbursement for state-run programs.”
“The acquisition also gives us an opportunity to overlay the Syntizen stack on top of our infrastructure to work with state governments and units,” he added.
The acquisition comes at a time when the Reserve Bank of India (RBI) is working on tightening KYC norms for fintechs. Moneycontrol had reported on July 15 that the new regulations will likely cover aspects of data sharing, privacy, extent of outsourcing relationships, compliance with KYC, AML norms, and formal legitimacy of products like buy now, pay later (BNPL).
In January this year, M2P fintech raised $56 million at a valuation of $600 million, with the objective of expanding through acquisitions and growing its international reach. “We see acquisitions as the way forward,” Madhusudanan had said after the announcement of the fundraise.
Syntizen, founded by Vamsi Kotte, Dinesh Desu, and Siddharth Kukatlapalli was incubated at Telangana’s T-Hub, India’s biggest government-backed startup incubator. The startup provides E-KYC services to finance companies such as Indiabulls Homeloans, Manappuram Finance, and Muthoot Finance among others. The startup’s Aadhar verification platform has been deployed by several state governments as well.
Vamsi Kotte, CEO of Syntizen will transition into a product leadership role at M2P and will continue working on Syntizen.
The transition from cash to digital has increased the relevance of digital onboarding due to changing customer profiles and risks involved, Kotte said.
“Representatives no longer need to be colocated to facilitate screening, opening up a wider market. Joining M2P Fintech gives us an opportunity to accelerate and scale geographically while providing an integrated KYC solution as part of the platform of services offered to M2P’s rapidly growing clientele,” he said.The company had only raised an undisclosed amount as part of a pre-Series A round in 2019, according to reports.