Ola buys the neobank Avail Finance for an undisclosed amount
Ola, India’s big carpooling company, has moved beyond its core offering and ventured deeper into the fintech space. While it previously had more fintech experiences allied to its platform, the company has now taken a major step down the road. Ola announces that it will acquire neobank Avail Finance for an undisclosed amount.
Currently, the transaction is still awaiting shareholder approval. If approved, Ola will then own 100% in the financial services company, an increase from the 9% it currently owns after investing in Avail Finance in 2019. As part of the transaction, the management team from Avail Finance to join Ola Financial Services.
Ola’s angle on the case is simple. The company said it would help the startup “strengthen its game in underserved credit segments that include blue-collar workers such as Ola’s driver-partner ecosystem.” This includes cross-selling “multiple loan products” to its driver-partners. According to Ola, the acquisition is a key step in the company’s broader push into the fintech sector.
Last valued at $86.6 million, Avail Finance was founded by Tushar Mehndiratta and Ankush Aggarwal, brother of Ola co-founder Bhavish Aggarwal, in 2016. The startup claims to be the first neobank in India to provide financial services to blue collar workers. Today, it has over 6 million users and has raised around $38.5 million across multiple rounds.
Its capabilities include providing small personal loans of up to ₹5,000 with the lowest interest, lowest processing fees and a hassle-free loan disbursement process. These will now be leveraged by Ola to strengthen its lending business and pave the way for expansion into neo-banking products.
Ola is no stranger to the financial services game, given that he has already invested $104 million in his own business and noted that he is seeing strong growth in his lending and insurance verticals. He is also said to be aiming to obtain a Non-Banking Financial Company (NBFC) license, which will allow the big rideshare company to engage in money market instruments, engage in wealth management and underwrite shares. and shares.
Last December, the company invested up to ₹786 crore in Ola Financial Services, which is now a wholly owned subsidiary of Ola. Financial services provided by the company include OlaMoney Postpaid (its BNPL offering which is now available to 40 million customers), OlaMoney Credit Card, OlaMoney Wallet and OlaMoney Car Insurance (coming soon).