In its third acquisition in just three months, BSE SME-listed fintech startup Veefin Solutions has acquired a 26% stake in EpikInDiFi through a share swap deal, valuing the latter at INR 125 crore. Veefin plans to increase its stake in EpikInDiFi to 100% over the next two years, cofounder and COO Gautam Udani revealed to Inc42.
As part of the agreement, EpikInDiFi founders Rajendra Awasthi, Sushmitshri Babu, and Vaidyanathan Balasubramaniam will receive stakes in a Veefin subsidiary. However, Udani refrained from disclosing the name of the subsidiary or the exact size of the stake. Additionally, Veefin has committed to investing INR 25 crore in EpikInDiFi over the next two years.
Established in 2017, EpikInDiFi provides cloud-based automation solutions for banks and financial institutions, offering analytics-driven tools like Business.ezee, Identity.ezee, Lend.ezee, and Collect.ezee. These solutions aim to streamline processes, enhance decision-making, boost operational efficiency, and reduce non-performing assets (NPAs).
The acquisition will enable Veefin to diversify its revenue streams by strengthening its foothold in areas such as personal loans, buy now & pay later (BNPL), green loans, credit cards, mortgage loans, and SME loans. Veefin already holds a strong presence in the working capital solutions segment.
Udani explained that one motivation behind the acquisition was EpikInDiFi’s product stack, which he believes slightly outperforms Veefin’s loan origination system (LOS), noting it could have become a potential competitor in the near future.
The deal will also add 50 banks and non-banking financial companies (NBFCs) to Veefin’s client base, providing opportunities to cross-sell products from other subsidiaries. “This has been a seminal year for the Veefin Group in building both in-house capabilities as well as leveraging inorganic growth opportunities to expand beyond supply chain finance and offer every single solution under the ambit of working capital finance to our Indian and global customers,” Udani said.
Notably, in June, Veefin acquired a 26% stake in Regime Tax Solutions, a company specializing in advanced GST compliance, accounts payable (AP), and accounts receivable (AR) automation. In August, Veefin acquired the Indian arm of global IT services provider Nityo Infotech Singapore for an undisclosed amount.
Veefin disclosed that the combined first tranche outlay for all three acquisitions over the past three months amounts to INR 215 crore, funded through cash and equity.
Founded in 2020, Veefin offers white-labeled supply chain finance and lending solutions for banks and NBFCs. Its services include a comprehensive lending stack, smart credit decisioning, digital identity verification, automated financial analysis, debt securitization, trade finance, and software consulting. Veefin’s client roster includes notable names like Yes Bank, Jio Financial Services, IndusInd Bank, and Hero FinCorp.
In its FY24 annual report, Veefin highlighted its strategic focus on acquiring companies with complementary products in the transaction banking and digital lending spaces. The company reported a 49% surge in profit after tax, reaching INR 5.63 crore in FY24, compared to INR 3.78 crore the previous year. Revenue from operations also grew by 72%, rising to INR 24.99 crore from INR 14.48 crore in FY23.
Veefin went public on the BSE SME platform in July 2023 at an initial share price of INR 82. As of Monday’s (September 16) trading session, its shares closed 2.8% lower at INR 682.55.
