PB Fintech, the owner of Policybazaar and Paisabazaar, plans to move away from taking a majority stake when acquiring companies following the exit of the founder of MyLoanCare, which it bought in 2021.
PB Fintech will now focus on minority investments, with exceptions for strategically crucial deals, co-founder Yashish Dahiya said.
“In hindsight, the mistake we made was we took too much equity. We took 70% stake. That’s a weak spot for us. The right percentage would have been 22-30%. Because if you go beyond 50%, it’s not really the founder’s company anymore,” Dahiya said on an earnings call.
PB Fintech acquired Gurugram-based loan marketplace MyLoanCare for ₹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 in integrating the acquired businesses.
Established in 2013, MyLoanCare allowed customers to compare various loan products and interest rates, similar to what PB Fintech’s Paisabazaar does. According to his LinkedIn profile, Gupta called it quits as the CEO of MyLoanCare in January, after running the company for over a decade.
‘Your company now’
“It was essentially that the founder said it’s your company, and so you should run it, and he (the founder) left. Running the company was not our purpose for investing. We always wanted it to be a founder-run company. And I think that is really the mistake that we made early on,” Dahiya said.
The investment in Myloancare Ventures Private Ltd amounting to ₹44.62 crore has been impaired to the extent of the share in the net assets of Myloancare Ventures, 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, prevailing liquidity issues, and significant uncertainty regarding future business plans. The company continues to explore various options in the best interests of stakeholders and will re-evaluate this position if and when the underlying assumptions regarding the survival and sustainability of the investee company improve,” the company added.
This comes when Paisabazaar’s loan disbursal fell 11% quarter on quarter to ₹3,140 crore in Q1 from ₹3,542 crore, as the firm sold 1.34 lakh credit cards compared with 1.4 lakh in the previous quarter. The company, however, continues to be adjusted EBITDA positive since December of 2022, it said.
PB Fintech reported a third consecutive quarter of profit in the first quarter of FY25. Net profit was ₹60 crore compared with a loss of ₹12 crore in the same period last year.
Revenue rose 52 percent to ₹1,010 crore from ₹666 crore a year earlier. The company’s premium from its online business grew 62% year on year, led by a spike of about 78% in the health and life insurance segment.
