SoftBank-backed ANI Technologies Pvt Ltd, which operates cab ride-hailing aggregator platform Ola Cabs, has agreed to buy neo banking platform Avail Finance which provides financial services to the blue-collared workforce, the company said in a statement on Thursday.
Ola presently holds around 9% in Avail Finance and had first invested in the company in 2019. The acquisition will help the cab aggregator bolster its financial services push, according to a prepared statement by Ola.
The two startups did not disclose the terms of the deal. Avail Finance had raised about $38.5 million (including about $4.5 million in venture debt) across multiple rounds and was valued at $86.6 million, according to insight platform Tracxn (paywalled).
It’s worth noting that Ola co-founder and chief executive Bhavish Aggarwal and Avail Finance founder and chief executive Ankush Aggarwal are brothers. The two companies share Alpha Wave Global and Matrix Partners as major common investors. The deal is seeking approval from shareholders.
Ola said the acquisition will help the startup “strengthen its play in the credit underserved segments that comprise blue-collar workers such as Ola’s driver-partner ecosystem. ” That play includes cross-selling “multiple lending products” to its driver-partners, it added.
The merger is a lifeline from Bhavish. Some investors were apprehensive about pushing this through because it would become a related party transaction. But Bhavish only needs a simple majority and will be able to push the deal through,” one of the persons cited above said.
About Avail Finance
Avail Finance was founded in 2017 by Bhavish’s brothers Ankush Aggarwal and Tushar Mehndiratta and offers products such as personal loans, salary advances, savings, to blue-collar workers.
Both Bhavish and Ankush are directors of the firm, apart from which Ola and Avail Finance also have common investors: Alpha Wave Global and Matrix Partners. Ola currently holds 9% in Avail Finance and had invested in the firm three years ago. Avail’s leadership will join Ola post the deal.
Avail Finance, operated by Avail Financial Services Ltd, claims to have over 6 million users. The acquisition will enhance Ola’s push into the fintech space. The company said as it looks to build a mobility-focused financial services business under Ola Financial Services.
With this acquisition, Ola Financial Services will further strengthen its play in the ‘credit underserved segments’ that comprises blue-collar workers such as Ola’s driver-partner ecosystem, Ola said.
“With this expansion, Ola will be able to cross-sell multiple lending products to its large driver-partner base; providing them a one-stop destination for all their financial needs,” the firm said in a statement.
Ola recently invested Rs 800 crore in its financial services business. Ola Postpaid, its BNPL offering is available to 40 million customers. The firm said its vehicle financing business is growing rapidly in conjunction with Ola Electric as well as Ola Cars.
