Veefin acquires 26% stake in EpikInDiFi

Veefin plans to gradually increase its stake in EpikInDiFi to 100% over the next two years, said co-founder and COO Gautam Udani

B2B fintech startup, which has made three acquisitions since June, plans to invest INR 25 Cr in EpikInDiFi over the next two years

Founded in 2017, EpikInDiFi provides cloud-based fintech automation solutions to banks and financial institutions

BSE-listed SME fintech startup Veefin Solutions, in its third acquisition in three months, acquired 26% stake in EpikInDiFi in a share swap deal that values ​​the company at INR 125 Cr.

Co-founder and COO Gautam Udani told Inc42 that Veefin intends to gradually increase its stake in EpikInDiFi to 100% over the next two years.

As part of the deal, EpikInDiFi founders Rajendra Awasthi, Sushmitshri Babu, and Vaidyanathan Balasubramaniam will acquire a stake in a subsidiary of Veefin. However, Udani did not disclose the stake amount or the name of the subsidiary in which the founders will acquire a stake. Additionally, Veefin plans to invest INR 25 Cr in EpikInDiFi over the next two years.

Founded in 2017, EpikInDiFi provides cloud-based fintech automation solutions for banks and financial institutions. He claims that his based on analytics solutions such as Business.ezee, Identity.ezee, Lend.ezee and Collect.ezee help institutions streamline processes, make smarter decisions, increase operational efficiency and reduce non-productive costs.

The acquisition of EpikInDiFi will help Veefin add new revenue streams by strengthening its presence in the personal loans, buy now pay later, green loans, credit cards, mortgages and SME loans segments. Veefin says it has a strong presence in the working capital solutions segment.

Udani also added that one of the reasons for the acquisition is that he rates EpikInDiFi’s product suite slightly higher than Veefin’s loan origination system (LOS), adding that it could become a competitor to Veefin in the near future.

The acquisition will add 50 banks and NBFCs to its portfolio. This will allow Veefin to cross-sell products from other subsidiaries to EpikInDiFi customers.

“It has been a transformative year for Veefin Group in terms of building internal capabilities as well as leveraging inorganic growth opportunities to go beyond supply chain finance and offer every working capital financing solution to our Indian and global clients,” Udani said.

It is worth noting that in June Veefin acquired 26% stake in Regime Tax Solutionsan advanced GST compliance, Accounts Payable (AP) and Accounts Receivable (AR) automation company.

Later in August, it acquired the Indian branch of global IT services provider Nityo Infotech Singapore for an undisclosed amount.

In a statement, Veefin said the total expected outlay for the first tranche of all three acquisitions in the last three months is INR 215 Cr (cash and equity).

Founded in 2020, Veefin offers white label supply chain finance and lending solutions to banks and non-bank finance companies, encompassing end-to-end lending solutions, intelligent credit decisioning, business intelligence, digital identity verification, automated financial statement analysis, debt securitization, cash management, trade finance, automated receivables and payables, and software consulting.

Its clients include Yes Bank, Jio Financial Services, IndusInd Bank and Hero FinCorp. In its annual report for fiscal year 2023-24 (FY24), the startup said its strategic priorities for the next year include acquiring companies with complementary products in the transaction banking and digital lending space.

Veefin’s profit after tax increased by 49% to INR 5.63 Cr in FY24 from INR 3.78 Cr in the previous fiscal. Revenue from operations increased by 72% to INR 24.99 Cr from INR 14.48 Cr in FY23.

Veefin made its debut on the BSE SME platform in July last year at INR 82. Its shares ended Monday’s (September 16) session down 2.8% at INR 682.55.