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March 26, 2024

“Fintech Unicorn slice’s Strategic Merger with North East Small Finance Bank: Pioneering Banking-Fintech Synergy Approved by CCI”

In a groundbreaking development reshaping India’s financial landscape, the leading fintech unicorn, slice, has secured approval from the Competition Commission of India (CCI) for its merger with North East Small Finance Bank (SFB). This strategic fusion, approved on March 12, signifies a pivotal moment in banking-fintech collaboration, promising innovative financial solutions and enhanced services for consumers across India.

The recent endorsement by the CCI paves the way for the integration of slice’s parent company, Garagepreneurs Internet Private Limited (GIPL), along with its NBFC arm Quadrillion Finance and subsidiary Intergalactory Foundry Private Limited (IFPL), with North East SFB and its subsidiary RGVN (North-East) Microfinance Limited. This merger is poised to create a powerhouse in the financial sector, combining the strengths of both entities to offer a comprehensive range of financial products and services.

The journey towards this unified financial ecosystem began with slice’s announcement in October 2023, expressing its intent to merge with North East SFB. This strategic move aimed to expand service offerings, enhance underwriting capabilities, and streamline customer experiences. Notably, slice had previously acquired a 5% stake in the bank in March 2023, signaling its ambitious vision for growth and diversification.

Founded in 2016 by Rajan Bajaj, slice initially gained prominence as a revolutionary buy now, pay later (BNPL) platform, introducing a credit card-like prepaid payment instrument without annual fees, interest, or late charges. However, regulatory changes in 2022 necessitated a shift in slice’s business model, leading to the pursuit of a merger to adapt to evolving industry dynamics.

The decision to merge comes amidst challenges faced by GIPL, with a reported 60% year-over-year increase in consolidated net loss to INR 405.8 crore in FY23, despite a substantial surge in operating revenue. The merger represents a strategic response to these challenges, aiming to leverage synergies and capitalize on the evolving digital financial services landscape.

As preparations for the merger accelerate, significant developments include the appointment of former Andhra Bank executive Satish Kumar Kalra as interim MD and CEO of North East SFB, along with the successful closure of an INR 75 crore debt round from Stride Ventures. Additionally, slice has introduced a UPI-first prepaid account for its users, underscoring its commitment to innovation and customer-centric solutions.

Beyond its implications for slice and North East SFB, this merger underscores the potential for collaboration between the fintech and traditional banking sectors to drive innovation and foster financial inclusion in the digital era. By harnessing the strengths of both entities, the merged entity aims to redefine the financial landscape, empowering individuals and businesses with accessible, efficient, and cutting-edge financial services.

Jhumpa Lahiri

Jhumpa Lahiri

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