Bengaluru-based digital lending platform Capital Float has acquired personal finance management app-maker Walnut for $30 million (Rs 209 crore) in a mixed cash and stock deal, a company statement said.
The deal will strengthen Capital Float’s presence in the consumer finance space, where Pune-based Walnut, which counts Sequoia India and SAIF Partners as investors, also has operations.
Walnut allows users to track spends, check on credit and bank balance, bill payments and split expenses within a group. In July 2017, it launched a small ticket credit line for its users called Walnut Prime based on user data and consumer behaviour. The platform has so far disbursed Rs 100 crore in consumer loans.
“Walnut Prime is a product of deep interest to us, and it will essentially become a new addition to our stable of exceptional, customised credit products,” said Sashank Rishyasringa and Gaurav Hinduja, co-founders of Capital Float, in the statement.
Run by Thumbworks Technologies Pvt. Ltd, Walnut was founded in October 2014 by Amit Bhor and Patanjali Somayaji, who both previously worked at Motorola Mobility.
In May 2015, it secured $7.9 million in seed funding from SAIF Partners and Sequoia Capital, filings with the Registrar of Companies showed.
In its last funding round, Walnut was valued at $20 million post-money, data from VCCEdge, the research arm of News Corp VCCircle, showed.
In June, media reports had stated that the company was looking to raise capital from a number of investors, including non-banking financial company InCred Finance.
In April this year, the online lender raised $22 million (Rs 144 crore) from Amazon India as part of its $45-million Series C round that it announced in August last year. Its other investors include Sequoia India, SAIF Partners, Aspada Investments, Creation Investments Capital Management LLC and Ribbit Capital. Besides equity, the company has also secured about $130 million (Rs 840 crore) in debt funding.
Set up by Rishyasringa and Gaurav in 2013, Capital Float started out by providing financial solutions to small and medium enterprises (SMEs). The company works across sectors including e-commerce, manufacturing supply chains, retail, travel and digital remittances. Since it registered itself as an NBFC with the Reserve Bank of India, its trade name has changed from Zen Lefin Pvt. Ltd to Capfloat Financial Services Pvt. Ltd. As an NBFC, it has partnered with 250 lending institutions to offer consumer loans to fund education, vocational training, wellness and healthcare, lifestyle and fitness among other sectors.
For the financial year 2016-17, the company saw its revenues soar but it losses tempered its growth as it spent more money. Operational revenue increased to Rs 46.58 crore from Rs 9.45 crore in the prior year, while losses more than doubled to Rs 63.47 crore from Rs 28.99 crore in the previous financial year.
Other deals in the space
While digital lending startups have attracted considerable investor interest, a number of firms have also made acquisitions.
Early this month, ZestMoney, a lending startup that lets users buy products online on EMI without a credit card, bought PhotographAI, an artificial intelligence-based platform, for an undisclosed amount.
In July, US-based software firm Ebix acquired Pune-headquartered lending software firm Indus for $29 million (around Rs 200 crore).