The Background India is one of the fast-growing markets in Fintech globally with a large market of unserved customers, increasing mobile penetration, favorable demographics, active start-up ecosystem and a large technology talent pool. Within Fintech, Alternative Lending is one of the fastest growing segments in India due to a large gap in access to and availability of credit. Growing Investments in Lending platforms through Artificial Intelligence & Machine Learning for customer acquisition, customer service, KYC and onboarding, coupled with growing smart phone usage and a favorable regulatory environment, has further fueled the rise of innovative alternative lending platforms in India.

The Deal PayMate, a leading provider of electronic business to business (B2B) payment solutions has successfully acquired 100% of equity in Zaitech Technologies Private Limited (Z2P), an AI and Machine Learning based digital lending P2P platform. Both companies join forces to create end to end solutions across payments, account reconciliation and innovative alternative lending solutions. IEG – India under the leadership of Managing Director Mihir Kapoor has acted as sole financial advisor to PayMate India offering an effective structure for both companies to mutually benefit from this transaction.

The Partners PayMate is India’s leading B2B payments company that provides a cloud-based solution to enterprise and SME customers in India. With over 20,000 registered businesses on its platform, including some of the largest and most recognizable brands in India, PayMate is leading the way in helping businesses to transition from traditionally slow and costly forms of payments like cash and checks to real-time, digital payments. PayMate automates the entire payments process including AR, AP, invoicing, vendor payments, cash flow management, and provides access to working capital at competitive rates. Z2P is India’s fast growing P2P digital lending AI platform. Consumers can register on the platform, upload their documents and get approved for a loan in just 1-hour. The Z2P technology focuses on quick credit decisioning and loan disbursals, along with deep credit analysis that has resulted in lower than average default rates. PayMate plans to leverage the Z2P lending technology for its B2B business.

The Perspective Fintech companies are moving towards integrated solutions by offering both payment and innovative lending solutions under one roof. SME lending in India which employs close to 40 percent of India’s total workforce and contributes 45 percent of the total industrial output faces many challenges especially on timely lending. This is the main challenge PayMate plans to address through this acquisition and building an integrated platform. Ajay Adiseshann, Founder of PayMate states “With a captive opportunity of USD 3bn in potential credit of which PayMate has facilitated 300m of credit to 20,000 businesses last year on the PayMate platform, this acquisition will help us accelerate deployment of credit with cutting edge lending technology to our customers." IEG – India Managing Director, Mihir Kapoor, underlines this by explaining: “PayMate has established itself as a clear market leader in B2B Payment solutions and this acquisition will help them scale up to new levels in loan disbursals and SME lending leveraging the Z2P technology."

Read more about the deal in "The Times of India"