PayU Consolidates its India Digital Credit Offering by Merging LazyPay and PaySense

PayU’s consumer lending business LazyPay and PaySense, India’s fastest growing digital credit platform, have today announced the plans to merge their business operations to build a full-stack digital lending platform in India. PayU will acquire a controlling stake in PaySense and all its assets at a valuation of $185 million. Additionally, PayU will inject a total of up to $200M in the new enterprise in the form of equity capital; $65M of the total amount will be immediately invested, while the balance corpus will be infused in the next 24 months to grow the loan book.

This planned merger is aligned with PayU’s long term vision of orchestrating a fintech ecosystem in India by partnering with the right companies and offering multiple financial services. The combination will bring together two highly complementary companies, each with an excellent reputation in the alternative lending space. PayU’s understanding of consumer backgrounds and insights into their purchase behaviour and affluence levels from its payment gateway business, and LazyPay’s deep experience in driving customer acquisition and engagement combined with PaySense’s strong analytics, tech & risk management capabilities will enable the combined entity to serve more of the new-to-credit Indian population. 

While India’s banked population has more than doubled since 2011 to over 80%, credit bureau coverage is still limited. BCG research shows that India’s digital lending market represents a $1 trillion opportunity over the next five years.

PayU’s unified digital credit platform will enable third parties such as banks, NBFCs and alternate lenders to co-lend and grow assets and will also enable borrowers to access credit when and where they need it in a digital and seamless way. The joint team will combine its complementary assets, capabilities and talented teams with the goal of making access to credit quick, seamless and widely available for the underserved in India and drive higher customer satisfaction.

Siddhartha Jajodia, Global Head of Credit, PayU commented, “Technology has the power to completely transform people’s access to financial services and the credit market in India is ripe for further digital disruption. This merger is the next step in our journey as we accelerate our vision for credit in India. We’re delighted to welcome Prashanth and his experienced team as we integrate this fast-growing business and build a full-stack digital lending platform aligned with PayU’s overall plan of orchestrating a broader fintech ecosystem in the region. 

Prashanth Ranganathan, Founder and CEO, PaySense added, “Providing more Indian consumers with access to credit is crucial to helping individuals grow and succeed. PayU is a natural partner for us as we both strive to make finance more simple, accessible and transparent. We’re excited to start bringing our personal loan product to more consumers throughout India and truly democratise credit.” 

Sayali Karanjkar, Co-founder, PaySense said, “We continue to witness the massively untapped market potential for short-term collateral-free loans among the digitally savvy aspirational youth. Our endeavor is to facilitate easy digital credit options for this new-to-credit segment and support their ambitions. Both PayU and PaySense believe in leveraging the enormous potential of technology to unlock credit and financial services for vastly underserved consumers in India and this merger reflects our allied vision of delivering financial freedom to all."

As a part of the deal, Prashanth Ranganathan, currently PaySense CEO will lead PayU’s credit business in India as the CEO of the new enterprise. Prashanth will continue to retain a stake in the merged enterprise, while all the other investors and shareholders will exit. PaySense’s strong management team of seasoned technology and fintech experts will also become part of the PayU’s credit team, adding value to the combined business.