Indian digital finance company Capital Float is reportedly in advanced discussions to raise up to $150m from Dutch fintech firm PayU.
Capital Float, which is owned and operated by CapFloat Financial Services, offers loans to small and medium businesses in India.
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Through this deal, PayU is seeking to acquire a 25%-30% stake in Capital Float, The Economics Times reported citing people familiar with the development.
If the deal materialises, the transaction will value Capital Float at around $500m.
Subsequently, PayU may also look to acquire a majority stake in the company, the report added.
However, CapFloat Financial Services and PayU did not confirm the investment.
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By GlobalDataFounded in 2013, Capital Float is one of the top digital lending platforms in the country. It offers business loans between INR100,000 to INR10m for terms between 1-12 months.
The investment in Capital Float will be the largest by PayU in an Indian startup. Additionally, the move is also expected to help the Netherlands-based fintech to step into business lending from the consumer lending segment.
The Economics Times quoted one of the sources as saying: “PayU has a huge focus on emerging markets, and India is possibly the biggest geography for them.
“The company will be committing substantial capital for investments and acquisitions, particularly to build its credit and SMB lending businesses.”
Till date, CapFloat Financial Services has raised a total of $117.7m through multiple funding rounds.
