Capital Float Acquires Walnut For $ 30 Million To Strengthen Consumer Credit Business

Walnut founders Patanjali Somayaji and Amit Bhor will join the management team

Approximately 35 Walnut employees will also join Capital Float

Capital Float wants to increase its total assets under management to $ 717.4 million within a year

Amazon and Sequoia-backed online lending platform India Capital Float has acquired personal finance management start-up Walnut for $ 30 million in a cash and stock transaction.

Capital Float expects the acquisition to help strengthen its new consumer credit business. Post-acquisition, the founders of Walnut Patanjali Somayaji and Amit Bhor to join Capital Float management team with their team of 35 employees.

“We are delighted to collaborate with Walnut, an accomplished member of the Fintech ecosystem. Our sensitivities and goals aligned with theirs, which largely paved the way for our decision to partner with the company. We were extremely impressed with the team and the product that Patan and Amit have built. Walnut Prime is a product of great interest to us, and it will essentially become a new addition to our stable of exceptional and personalized credit products, ”said Sashank Rishyasringa and Gaurav Hinduja, co-founders of Capital Float.

So far, Capital Float has raised $ 117.7 million in funding, including $ 22 million from Amazon as part of the Series C funding round and $ 7.2 million of debt investment from Triodos Investment Management, based in the Netherlands.

Earlier reports had surfaced that InCred was looking to invest $ 7.3 million in Walnut.

Patanjali Somayaji and Amit Bhor, co-founders of Walnut said, “Since launching Walnut, we have focused on simplifying personal finances for our users. We are excited to partner with Capital Float as we aim to grow exponentially and bring Walnut and its intuitive features to millions more Indians. We believe having Capital Float by our side opens up a huge set of opportunities by leveraging their strength in online lending and financial products through our innovative approach to consumer experiences. “

Walnut: Personal finance management

Founded in October 2014, based in Pune Walnut offers a personal finance management solution via a mobile application. It allows its users to share funds with friends, make bill payments, track spending and check card and bank balances and perform peer to peer transactions.

With about 7 million app downloads and approximately 1 million monthly active users and 300,000 daily active users, Walnut had recently launched Walnut Prime which allows its users to access consumer loans up to INR 1 lakh to be transferred directly to their bank accounts.

During the demonetization period, Walnut had offered a queue management system that helped consumers learn about queues at a specific terminal and the availability of cash.

How does Capital Float plan to take advantage of walnut technology?

Capital Float will use Walnut’s credit scoring model, which captures data from alternative sources such as income and purchasing power, to extend lines of credit to new customers.

“The Walnut team has already approximately $ 14.35 million (INR 100 Cr) of approved line of credit for customers on its mobile app, and as part of the acquisition, we would like to increase those numbers, ”said Hinduja.

With this acquisition, Capital Float wants to increase its total assets under management to $ 717.4 million (5,000 Cr INR) in one year, from $ 186.52 million (1,300 Cr INR), and expand its customer base to 500K, up from around 125K now.

On 30% of the company’s assets under management are in the consumer loan portfolio, said Hinduja.

Additionally, Capital Float plans to leverage its presence in 100 locations nationwide. to significantly expand Walnut’s coverage from approximately eight locations currently.

Wealth management industry

More recently we’ve seen giants like Flipkart and Paytm also test the waters in the financial advisory or wealth management segment.

Paytm has set up its Paytm Money financial products arm Ltd, to focus on creating its investment and wealth management products for its users. Paytm Money has already registered over 5 Lakh (half a million) users.

Flipkart has launched its investment firm, Sabin Advisors too silently, with speculation that all of Flipkart’s investments could be channeled through this setup.

Some of the other startups in the space include Fisdom, WealthTrust, Tipbazaar, and Scripbox.

In addition, the Indian fintech software market expected to cross $ 2.4 billion now until 2020, according to a report by KPMG India and NASSCOM. India is currently home to over 500 fintech startups.

The sector continues to experience growth, as according to the Inc42 Indian Tech Startup Funding Q1 2018 report, fintech as a sector saw the highest funding in the first quarter.

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