In a groundbreaking move for the fintech and banking sectors, slice, a leading fintech unicorn, is set to merge with North East Small Finance Bank (SFB), having received the green light from the Competition Commission of India (CCI) on March 12. This approval marks a significant milestone in the financial landscape, promising to reshape the future of digital banking and fintech collaborations in India.
A Strategic Fusion Approved
The CCI's recent endorsement clears the path for the integration of Garagepreneurs Internet Private Limited (GIPL) — slice's parent company, along with its NBFC arm Quadrillion Finance and another subsidiary Intergalactory Foundry Private Limited (IFPL), with the Guwahati-based North East SFB and its subsidiary RGVN (North-East) Microfinance Limited. This merger is poised to create a formidable entity in the banking and fintech space, leveraging strengths from both entities to offer enhanced financial services and products.
Navigating Towards a Unified Financial Ecosystem
The approval arrives after slice's announcement in October 2023 about its merger intentions with North East SFB, aiming to broaden its service offerings, improve underwriting tools, and streamline the customer experience. This strategic move followed slice's acquisition of a 5% stake in the bank in March 2023 for $3.42 million, hinting at the fintech's ambitious plans for expansion and diversification.
Founded in 2016 by Rajan Bajaj, slice began as a pioneering buy now, pay later (BNPL) platform and introduced a credit card-like prepaid payment instrument without annual fees, interest, or late charges. However, regulatory changes in 2022 led slice to discontinue this service and seek a merger to realign its business model.
Embracing Change for Growth
The pivot comes at a time when GIPL, slice's parent company, reported a 60% year-over-year increase in its consolidated net loss to INR 405.8 crore in FY23, despite a 199% surge in operating revenue. The merger is a strategic response to these challenges, aiming to harness synergies and capitalize on the evolving digital financial services landscape.
As slice prepares for the merger, significant developments include the appointment of former Andhra Bank executive Satish Kumar Kalra as interim MD and CEO of North East SFB and the closure of an INR 75 crore debt round from Stride Ventures. Furthermore, slice has introduced a UPI-first prepaid account for its users, demonstrating its commitment to innovation and customer-centric solutions.
This merger not only signifies a transformative step for slice and North East SFB but also highlights the potential for fintech and traditional banking sectors to collaborate, innovate, and drive financial inclusion in the digital age.
