Ola has entered into an agreement to acquire Avail Finance, a fintech company founded by the brother of the ride hailing platform’s CEO Bhavish Aggarwal. The acquisition would be worth $50 million, it is learnt, and is awaiting shareholders’ approval.
Ola already owns 9 per cent stake in Avail Finance and Bhavish Aggarwal serves on the company’s board as a director, while his brother Ankush Aggarwal owns over a 25 per cent stake in the company.
“The acquisition 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 further strengthen its play in the credit underserved segments that comprises blue collar workers such as Ola’s driver partner ecosystem,” Ola said in a statement.
As part of the deal, Avail Finance’s leadership team will join Ola Financial Services, a 100 per cent subsidiary of ANI Technologies, Ola’s parent company.
Sources aware of the details of the transaction said that the deal came through as Avail Finance was facing financial difficulties and was struggling to raise funds. “The company was valued at around $70 million after its Series B round of $11.5 million in August 2020. So the acquisition at $50 million is a step down from its earlier valuation,” said a person aware of the development, requesting anonymity.
According to Avail Finance’s regulatory filings, its revenue from operations at Rs 4.5 crore decreased 20 per cent in FY21 compared to Rs 5.6 crore in FY20. It also registered losses worth over Rs 37 crore in FY21.