Ola, the ride-hailing giant, announced on Friday that it has entered into an agreement to acquire Avail Finance, an online lending platform run by Bhavish Aggarwal’s brother Ankush Aggarwal.
The companies did not disclose the deal’s terms because it is still subject to shareholder approval. However, according to a Moneycontrol report citing sources, Ola may acquire Avail Finance in a share swap deal for $50 million.
Notably, Ola first invested in Avail Finance in 2019 and now owns 9% of the company.
Ankush Aggarwal and Tushar Mehndiratta founded Avail Finance in 2016 as financial services and lending platform for blue-collar workers. Under one roof, the company provides savings, insurance, lending, and investment solutions. It has more than 6 million users.
Ankush and Bhavish Aggarwal are both directors of the company, which has raised $38.5 million in funding from investors such as Flipkart’s Binny Bansal. Kunal Shah of CRED, Matrix Partners India, and Ankit Bhati, co-founder of Ola, are also involved. Bhavish Aggarwal had also participated in the company’s Series A round on his own.
Ola believes that the acquisition will help the company improve its own financial services offering for underserved segments, as well as its driver partner ecosystem. Ola said in a statement that it intends to expand into a neo banking product by leveraging Avail Finance’s products and capabilities.
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Last year, the ride-hailing behemoth invested Rs 800 crore in its financial services division.
The news comes as Ola prepares to go public in 2022. The company raised $500 million in a pre-IPO round last year and has been aggressively expanding its electric mobility business on the side.