SMEs-focused digital lending firm Capital Float has acquired personal financial management app Walnut for about $30 million.
The cash-and-stock deal for the Bengaluru-based fintech company is expected to strengthen its new consumer-lending business that it started a few months ago.
The development comes at a time when Walnut was reportedly in talks with non-banking finance company InCred Finance who is seeking to invest around Rs 50 crore into it.
Following the acquisition, Walnut’s founders Patanjali Somayaji and Amit Bhor will join the leadership team of Capital Float.
About 35 employees of Walnut will also join Capital Float, which will bring the total headcount at Capital Float to 650.
Backed by Sequoia and SAIF Partners, Pune-based Walnut offers a personal finance management solution through a mobile application. It allows its users to split funds between friends, bill payments, track spends and check card and bank balances and do peer to peer transactions.
The startup has around 7 million downloads of its mobile app and about 1 million monthly active users and 300,000 daily active users.
The acquisition will also help Capital Float to use Walnut’s credit assessment model, which captures data from alternative sources such as income and purchase capacity, to extend credit lines to new customers.
Founded in 2013 by Sashank Rishyasringa and Gaurav Hinduja, Capital Float claims to have 50,000 customers across 300 cities in India. It also disburses more than 10,000 loans each month and now has an outstanding loan portfolio of more than $170 million, with a default rate of about 2 per cent.
Its offerings include e-commerce seller financing, term loans, receivables financing and commercial vehicle loans.
With this acquisition, Capital Float wants to increase its total assets under management to Rs 5,000 crore within a year from Rs 1,300 crore presently, and expand its customer base to 500,000 from about 125,000 now.
The fintech firm had raised Rs 144 crore in its extended Series C round from Amazon in April. It now clocks around $110 million in equity funding while it has raised about $130 million in debt from leading banks and NBFCs.
The development was reported by ET.