In a meeting held in January 2022, the startup decided to acquire 100% of the issued, subscribed, and paid-up share capital of risk management startup Karza. As per a RoC (return on capital) filings accessed by Inc42, Perfios is acquiring Karza for a total of INR 597 Cr (~USD 80 million).
The news comes on the heels of Perfios joining the unicorn club, following a USD 70 funding round which values the company at more than USD 2 billion valuation.
As part of the deal, Perfios will be acquiring 100% of the issued, subscribed, and the paid up share capital of Karza for INR 554.5 Cr (USD 73.5 million) and additional INR 42.4 Cr (USD 5.6 million) towards subscription of equity securities of Karza Technologies.
A Karza spokesperson told Inc42 that the deal is in the works but is yet to be finalised. The company said that post the acquisition, Karza’s three founders will continue to run the startup under Perfios’ leadership. Besides, all employees of Karza will remain with the company even after the acquisition.
With this acquisition, all Karza investors who hold a total of 859,096 equity shares will exit the company. Karza is backed by Singapore Angel Network, Artha Venture, among others. The founders will also sell their stake in this transaction.
The startup is a Mumbai-based banking and business intelligence solutions provider. Karza claims that its product helps detect frauds, transfer critical data, collect, and analyse data for lenders thus providing better insights and assistance in recoveries.
The acquisition of Karza is in line with Perfios’ efforts to strengthen its lending-focussed product offerings. In 2019, Perfios had acquired Noida-based FintechLabs Technologies which is into the business of providing digital lending software to banks, NBFCs, digital lenders, and financial institutions in India and overseas.
India’s overall fintech market opportunity is estimated to be USD 1.3 trillion by 2025, growing at a CAGR of 31% during 2021-2025. It needs to be highlighted that of the entire market size, lending tech is likely to account for 47% (USD 616 billion), followed by insurtech at 26% (USD 339 billion), and digital payments at 16% (USD 208 billion).
The market size for fintech SaaS in India is expected to see a 2.7x surge in the next three years, from USD 4.6 billion in 2022 to USD 12.6 billion in 2025.
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