The South-Africa based technology investor Naspers is in talks with the Indian Fintech startup Capital Float for an acquisition deal. According to three sources, the global Internet and entertainment group is set to purchase the latter instead of the original aim to invest in it.
In a report from Entracker, one of the three said: “Instead of investment, Naspers has shown interest in a complete acquisition. Naspers wasn’t ready to give half a billion USD valuation as Capital Float’s loan book isn’t as healthy as it was expected or projected. The firm has a double-digit NPA rate (about 15-18%).”
The talks on the said deal are said to have progressed into a fairly advanced stage. “The due diligence for acquisition is almost completed and the value of the transaction would be in the range of $350 to $380 million,” explained one of the sources.
Sashank Rishyasringa, the co-founder of Capital Float, confirmed the news. In an emailed response, he said: “As the largest digital lending company in India, we do engage in conversations with interested investors with similar strategic ambitions and perspectives. Naspers/PayU and Capital Float were involved in such a discussion for a period of time. However, the parties have mutually decided that the best route to collaborate would be through business initiatives in the future rather than via strategic investment.”
If everything goes well, the deal is expected to be completed by July of the same year. However, the sources also implied that existing investors of Capital Float, such as Amazon, SAIF Partners, and Sequoia, will be withdrawing once the deal pushes through.
While Capital Float is quick to respond to the questions, Naspers only said: “It is the company’s policy to neither acknowledge nor deny its involvement in any merger, acquisition or divestiture activity nor to comment on market rumours.”
