PayU India has acquired digital credit startup PaySense for $185 million and will merge it with its 'buy now pay later' entity LazyPay, the Gurugram-based payments major has said.
It had acquired all the assets of PaySense and committed $200 million for future growth, the company said in a press release. While $65 million will be equity investment, the rest will be used to shore up the loan book of the combined entity.
"Technology has the power to completely transform people’s access to financial services and the credit market in India is ripe for further digital disruption. This merger is the next step in our journey, as we accelerate our vision for credit in India," said Siddhartha Jajodia, global head of credit, PayU.
Through this acquisition, PayU has further consolidated its position as a major fintech player in India and to develop a full-stack lending platform -- from large personal loans to small- value instant credit to consumers through buy now pay later model.
The new venture will be headed by Prashanth Ranganathan, who cofounded PaySense with Sayali Karanjkar.
PayU said that the PaySense employees will continue to work for the new entity but there was no clarity on Karanjkar's role. She might quit the company, industry insiders said.
India needs innovative financial options to drive consumption and this deal gives PayU just the right mix to tap into the trillion dollar lending opportunity in the country.
PaySense, through personal loans, will help consumers meet their travel expenses, medical emergencies or social obligations, while LazyPay will allow them to buy products online and pay for them later, at the end of the stipulated time period.
"Providing more Indian consumers with access to credit is crucial to helping individuals grow and succeed. PayU is a natural partner for us as we both strive to make finance more simple, accessible and transparent," said Ranganathan.
PayU has been on an acquisition spree, setting up its broader fintech play in the country. It started with Citrus Payments back in 2016, went on with Wibmo last year and now PaySense.
There were also reports that PayU was looking to pick up a controlling stake in Capital Float, but the talks did not work out.