The equity-plus-cash deal is worth Rs 250 crore, or $30 million, people aware of the negotiations told ET.
Some of Goals101’s investors including Nexus Venture Partners, Sprout Venture Partners and Dentsu will get a stake in M2P, while others will be getting a cash out, they said.
The acquisition will help M2P Fintech double down on its existing credit card management suite and increase its value-added service offerings. It will leverage Goals101’s technology to offer banks and fintechs hyper personalisation, helping them target customers and increase their wallet spends better.
The deal also marks M2P Fintech’s foray into the wealthtech segment.
Goals101 will work as an added layer on top of M2P’s credit card and programme management platform for banks and fintechs. Through Goals101, the firm will also be able to offer robo-advisory stack to its clientele.
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“There is a lot of pressure on banks to reduce the number of systems they have. Further, systems have to scale to capacity. With the acquisition of Goals101, we saw an opportunity to bring platforms together and offer a cohesive solution,” said Madhusudanan R, cofounder and chief executive of M2P Fintech.“Through the Goals101 platform on M2P, fintechs and banks can now have the tools which will help them maximise consumer spends and increase usage of their products,” he said in an interaction with ET.
Founded in 2016, Goals101 provides advanced algorithms and analytics tools to banks and online merchants, helping them with actionable insights on consumer spends and their transaction behaviour. Its data tool sits inside the bank’s firewall and platform, which makes the integration deeper.
As a part of the deal, the entire 30-member team of Goals101 will join M2P.
This is the sixth acquisition for M2P Fintech. Its earlier acquisitions include cloud-based core banking system BSG ITSOFT, e-know your customer (KYC) authentication solution provider Syntizen, and debt recovery platform Origa.ai.
M2P has also made investments in payment processing solutions provider LivQuik and account aggregator platform Finvu, among others.
Diversifying revenues
With the ongoing onslaught of the Reserve Bank of India on consumer durable loans, M2P has tried to diversify its revenues to de-risk its business.
The nine-year old fintech has three broad offerings – core banking and loan management system stack; payment tools such a credit card management and embedded finance; along with value-added services – for banks and fintechs alike.
Of these offerings, payment solutions contribute to 60% of its revenues while only 5-10% come from value-added services. The acquisition of Goals101 is in line to grow revenues of its value-added services portfolio.
With local fintechs in stress post the RBI guidelines on digital lending, M2P has pushed the lever on international expansion in newer geographies such as West Asia, with more than 40% of its revenues coming from international markets now, Madhusudanan told ET. The move is also to diversify its revenue pools further from just fintech platforms.
It has also doubled down on its offerings for banks. At present, almost 70% of its revenues come from providing tools to banks, compared to 30%-35% last year, before the digital lending guidelines were announced.
Further, it is also continuing to see demand from banking clients in international geographies.