PB Fintech avoids majority takeovers after MyLoanCare experience

PB Fintech, the owner of Policybazaar and Paisabazaar, plans to move away from taking a majority stake in acquiring companies following the exit of the founder of MyLoanCare, which it bought in 2021.

PB Fintech will now focus on minority investments, barring strategically important deals, said co-founder Yashish Dahiya.

“In retrospect, we made a mistake because we took too much equity. We took 70% equity. That’s our weak point. The right percentage is 22-30%. Because once you go beyond 50%, it’s no longer the founder’s company,” Dahiya said on a conference call regarding financial results.

PB Fintech takes over Gurugram-based lending marketplace MyLoanCare ₹40.41 crore in December 2021. Gaurav Gupta, the founder, left the company earlier this year, leaving the reins in the hands of the parent entity, highlighting the potential challenges associated with integrating acquired businesses.

Founded in 2013, MyLoanCare allowed customers to compare different loan products and interest rates, similar to what PB Fintech’s Paisabazaar does. According to his LinkedIn profile, Gupta left his job as MyLoanCare CEO in January after leading the company for more than a decade.

“Basically, the founder said this is your company, so you should run it, and he (the founder) left. Running the company was not the purpose of our investment. We always wanted it to be a founder-run company. And I think that was really the mistake we made in the beginning,” Dahiya said.

Investment in Myloancare Ventures Private Ltd of ₹The value of its stake in the net assets of Myloancare Ventures has declined by Rs 44.62 crore, the company said in a statement on Tuesday.

“This impairment takes into account the current state of affairs and other relevant factors, including excessive cash burn, ongoing liquidity challenges and significant uncertainty regarding future business plans. The company continues to explore various options in the best interests of its stakeholders and will reassess this position if and when the fundamental assumptions regarding the survival and stability of the investee company improve,” the company added.

This comes as Paisabazaar’s loan disbursement fell 11% compared to the previous quarter ₹3140 crore in Q1 from ₹3,542 crore as the company sold 1.34 lakh credit cards as against 1.4 lakh in the previous quarter. The company, however, continues to be adjusted EBITDA positive as of December 2022, it said.

PB Fintech recorded its third consecutive quarter of profit in the first quarter of fiscal year 2025. Net profit amounted to ₹60 crore as against the loss ₹12 crore during the same period last year.

Revenues increased by 52 percent ₹1010 crores from ₹666 crore a year earlier. The company’s premium from its online business grew 62% year-on-year, led by a growth of around 78% in the health and life insurance segment.