Based out of Bengaluru, Niyo Solutions, a digital banking start-up made headlines as it acquired Goalwise, a mutual funds distribution platform in a cash and share deal. The company has not disclosed the exact amount of the deal.
As per information, one equity investor of Goalwise has exited the company through this deal. Post the deal, founders of Goalwise have been allocated a discreet number of Niyo shares in the process.
The acquisition looks promising, and by adding the new venture, Niyo Solutions plans to foray into the direct mutual funds business by increasing its offering beyond prepaid cards and savings bank account.
As per the deal details, Goalwise founders are set to onboard its 25 member team into Niyo Wealth, which will operate as a subsidiary within the Niyo banner.
“With this acquisition, we will be pushing on a 0-0-7 strategy, zero forex mark-up cards, 7 percent interest rate on savings account and now zero commission mutual funds,” said Vinay Bagri, Chief Executive Officer, Niyo Solutions, while speaking to Moneycontrol.
Co-founders of Niyo, CEO Vinay Bagri and CTO Virendra Bisht, own majority stakes in the start-up. As a part of the acquisition, the leadership team at Goalwise will manage and operate Niyo Wealth as an independent vertical within Niyo.
Goalwise, the direct mutual fund investment online platform, was indeed a promising deal for Niyo as the company works with 60,000 users along with assets under management worth INR 850 crore. The company initially offered services to salaried millennials from metro cities with an average income of INR 10 lakh.
Designed to offer goal-based investment solutions, the company closely dealt with investment aspects such as mutual fund selection, target-tracking and rebalancing, and more.
Expert take on the acquisition
As per Vinay Bagri, Co-founder Niyo, monetization is the end goal of the company, and it is all set to experiment with a variety of pricing models in the journey. He also mentioned that in this business, money could be made through auto investment features, roboadvisory, product-based fees, and several other incredible features.
Conceptualized and brought into reality by Vinay Bagri and Virendra Bisht, Niyo was established in 2015. Before kickstarting the promising venture, Virendra Bisht was associated with MakeMyTrip and MobiKwik. On the other hand, Vinay Bagri worked with Standard Chartered and Kotak Bank.
On the investment front, Niyo is supported by big names such as Horizons Ventures, Tencent Holdings, Prime Venture Partners, and Social Capital.
Niyo commenced business with an introduction to a travel card with an aim to streamline forex for customers. The company issued these forex cards in partnership with banks. The company also offers savings accounts in partnership with IDFC First Bank.
Bagri states, “Our travel business has been badly affected by the COVID-19 pandemic, but our blue-collar salary account business has come back with a V-shaped recovery.”