Bengaluru, March 24 Mobility major Ola has reached an agreement to acquire a 100 per cent stake in Avail Finance, a neo bank that provides financial services to the blue-collared workforce, for an undisclosed amount.
In 2019, Ola had invested an undisclosed sum in Avail Finance to partner on building financial solutions for Ola’s driver-partners. Avail Finance was founded by Ola CEO’s brother Ankush Aggarwal and Tushar Mehndiratta in 2017. Before starting Avail Finance, Ankush was the Director of Operations at Ola and led the integration of auto-rickshaws on the Ola’s platform.
This acquisition of Avail Finance is a key step in Ola’s broader push into the fintech space as it looks to build a mobility- focused financial services business under Ola Financial. With this acquisition, Ola Financial Services will strengthen its play in underserved segments comprising blue-collar workers, such as Ola’s driver partner ecosystem. The deal is subject to shareholder approval.
Avail Finance’s products and capabilities strengthen Ola’s lending business and help it expand into Neo Banking products. With this expansion, Ola plans to cross-sell multiple lending products to its large driver partner base. Ola’s fintech business will be augmented by Avail Finance’s leadership team with experience in the consumer lending industry, a technical team across tech, product and design, data science and analytics. All the employees and co-founders of Avail Finance will join Ola as part of the acquisition deal.
Further, Ola has recently invested nearly ₹800 crores into its financial services business. Ola said that its BNPL (buy now pay later) offering, Ola Postpaid, is available to 40 million customers. Further, the company’s other financial services like vehicle financing and insurance are growing rapidly on the back of the company’s sister entity Ola Electric and used car business Ola Cars.
In November 2021, Ola’s regulatory filings noted that its subsidiary, Ola Financial Services (OFS) will expand its insurance business internationally to support the operations of Ola’s mobility business through innovative insurance products designed for the UK, Australia and New Zealand market.
Further, OFS was said to be launching new capabilities to the pay-later instrument to make it more appealing for the users and expand its suite of products by launching new lending products in the form of two- and four-wheeler loans and personal loans to offer a comprehensive financial product ecosystem to the customer.
Last year, Ola had announced plans to go public by early 2022 and was estimated to raise around $1 $2 billion from the IPO. However, sources told BusinessLine earlier this week, that the company’s IPO timelines have changed due to market conditions and company readiness but the team is gearing towards it.
In December 2021, Ola had obtained $500 million through a Term Loan B from marquee international institutional investors. This was preceded by a fund-raise of $139 million Series J from Edelweiss, Siddhant Partners, IIFL, Tejal Merchantile, Hero Enterprise , Vicco Laboratories, Alka DP Family Trust and Atul DP Family Trust, among others. The mobility major was last valued at $7.3 billion in its Series J round.
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.