E-commerce major Snapdeal has picked up majority stake in digital financial products platform, RupeePower, for an undisclosed amount through a stock and cash deal.
The move will help Snapdeal to enter the Rs 4,500 crore online financial services market in the country.
"Consumers often face difficulty while deciding and buying financial products/services. This partnership will help solve distribution challenges of the financial services ecosystem and make it more inclusive," Snapdeal co-founder and CEO Kunal Bahl told reporters.
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He declined to comment on the financial terms of the deal.
Founded in 2011, Gurgaon-based RupeePower offers a digital distribution platform for loans, credit cards and other personal finance products. At present, it has 40 employees.
"Over the next one year, we plan to ramp up our headcount to about 200 people. Most of these will be engineers, who have an understanding of the financial services market," RupeePower founder and CEO Tejasvi Mohanram said.
RupeePower, which counts State Bank of India, ICICI Bank and Bajaj Finserv among its partners, claims to have enabled credit disbursal worth Rs 1,500 crore through its platform in FY2014-15.
"In the next 24 months, we expect this number to grow to about Rs 6,000 crore (USD one billion)," Bahl said.
He added that going ahead, there will be integration of the platforms to allow Snapdeal consumers to make purchases using the finance options offered through RupeePower.
"The share of digital origination of credit is poised to grow from today's 7.5 per cent to 40 per cent over the next four years, in an Rs 400,000 crore (USD 67 billion) retail credit market growing at 20 per cent annually," Mohanram said.
RupeePower aims to become the No 1 originator of financial products over the next couple of years with the investment received from Snapdeal, he added.
Snapdeal also runs a 'Capital Assist' initiative, under which its helps its sellers to secure financing to expand their operations.
Launched in August last year, the company has already helped over 150 sellers raise over Rs 50 crore through the initiative.
Asked if Snapdeal is looking at raising funds, Bahl replied in the negative.
"We have used our funds in a very efficient manner. Raising money is a full time job and we want to focus on our business. We want to bring entrepreneurs on board (who have products and solutions) because in the long term that will help sustain the business," he said.
