NeoGrowth evaluates strategic deal as business becomes profitable

economictimes.indiatimes.com:

NeoGrowth is scouting for a potential buyer to either get acquired or sell a significant stake to a strategic investor, said two people in the know.

The company is also open to a major funding round, as it got back to black in the last fiscal after two years of losses, induced by Covid-19.

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“Multiple conversations are happening at the board level about the next path. All the options are on the table, strategic partnership or a large private equity round or a big transaction. We are trying to finalise our investment banker currently,” said Arun Kumar Nayyar, managing director, NeoGrowth Credit.

Nayyar added that he has not met any potential suitors as of now, but on a pre-deal basis some conversations might have happened.

A senior fintech executive on the condition of anonymity said that having turned profits in the last financial year, NeoGrowth is hoping to attract a suitor from the financial services world.

“Given the cash flow-based lending NeoGrowth does, a payment company which is looking to scale up credit capabilities can bring good complementarity to the business,” the executive added.

But finding a good deal at a suitable valuation might be challenging in these times, when venture money is hard to come by. Also with the likes of Paytm, BharatPe and even PhonePe scaling up their credit offerings to small retailers, there is tremendous competition being faced by someone like