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Capital Float acquires personal finance firm Walnut for $30M

Digital lending company Capital Float has acquired personal finance management application Walnut for $30 million. As a part of the acquisition, Walnut’s founders Patanjali Somayaji and Amit Bhor will join the leadership team of Capital Float.

While Capital Float’s statement did not contain the financial or any other details of the acquisition, multiple reports indicate that Walnut’s 35-member team will be absorbed into Capital Float, which will bring Capital Mind’s headcount to 650. Reports also indicate that the acquisition is a cash-and-stock deal.

With the acquisition, Capital Float hopes to boost its recently launched app-based consumer financing business particularly through Walnut’s direct digital credit line business, Walnut Prime. The service employs Walnut’s credit assessment model, dubbed ‘Prime Credit Score’, which captures data from alternative sources such as income and purchase capacity, to extend credit lines to new customers.

Capital Float also wants to increase its total assets under management to Rs 5,000 crore within a year from the current Rs 1,300 crore, and expand its customer base to 500,000 from about 125,000 now, Hinduja told Economic Times.

Backed by Sequoia and SAIF Partners, Pune-based Walnut offers a personal finance management solution through a mobile application. It allows its users to split funds between friends, bill payments, track spends and check card and bank balances and do peer to peer transactions. Walnut claims to have 7 million app downloads and about 1 million monthly active users and 300,000 daily active users. Interestingly, the development also comes after reports claimed that Walnut was looking to raise Rs 50 crore from NBFC InCred Finance.

Capital Float, founded in 2013 by Sashank Rishyasringa and Gaurav Hinduja, claims to have 50,000 customers across 300 cities in India. It also claims to disburse more than 10,000 loans each month and now has an outstanding loan portfolio of more than $170 million. Its offerings include e-commerce seller financing, term loans, receivables financing and commercial vehicle loans.

The lending firm had raised Rs 48 crore from the Netherlands- based asset management company Triodos Investment Management in May, soon after raising Rs 144 crore in its extended Series C round from Amazon in April. Overall, the company raised around $110 million in equity funding and about $130 million in debt from leading banks and NBFCs.

Competition in the lending space

Capital Float will compete with players like CoinTribe, PaySense, NeoGrowth, Paytm-backed CreditMate, CASHe, LendingKart, MoneyTap, EarlySalary, Faircent, Loantap, LazyPay, LoanMeet amongst others. Last month, digital payments company MobiKwik also announced the launch of a new service that will offer instant loans of Rs. 5000 on its application.

In regards to speculated launches, California-based fintech company Tala said that it was also bringing its lending app to India. Reports claimed that Flipkart is all set to enter the financial services space with a focus on offering credit and insurance products to both consumers and sellers on its platform. Paytm is also reportedly trying to enter the lending space and is seeking a license from the central bank to become a peer-to-peer lending platform.

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