Naspers-owned PayU lays off staff at credit lending unit PaySense
Naspers-owned fintech major PayU has undertaken layoffs at PaySense, the digital credit business it acquired in an all-cash deal in January this year.

While a PayU spokesperson confirmed the development, the company did not specify the number of employees that are being, or have been, laid off. However, according to sources aware of the matter, an estimated 40-50 employees, across sales and other operational functions, have been fired.

“As we progress to be future ready and find efficiencies in our business and automate, certain roles and functions become redundant. Where possible we have absorbed, repurposed or re-skilled roles to retain as many people as possible within a number of functions in the organisation. We are working hard with those impacted to help them during this transition period,” a PayU spokesperson told ET.

However, the PayU spokesperson stressed that layoffs were not connected to the ongoing Covid-19 pandemic, but were a result of the company automating various processes. “…but to enable us to build the end-to-end digital business and move towards automation as we need to achieve our mission of offering a credit platform for underserved consumers in India,” the spokesperson added.

The layoffs come about seven months after the Naspers-owned fintech giant, which counts India as its largest market, acquired a majority stake in Mumbai-headquartered PaySense, valuing the latter at about $185 million.

At the time, a senior executive at PayU had told ET that the transaction involved PayU buying out all the existing financial and angel investors of PaySense, a list that included Nexus Venture Partners, Jungle Ventures, Rocketship, along with a host of angel investors.

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PayU had said it will merge its existing lending business Lazypay with PaySense, to create unified digital platform, and will also infuse $200 million in the latter over the next 24 months, a sum that included an immediate investment of $65 million, thereby taking the deal size to over $300 million, or more than Rs 2,100 crore.

The job cuts also come at a time when India’s shadow banking industry has been under prolonged stress that has been further exacerbated by the ongoing pandemic that has shrunk the country’s economy.

India’s decade-old fintech lending industry continues to face its sternest test yet in fiscal 2021, with large scale job losses and cash flow disruptions among consumers likely to set off mass defaults, shrink demand for consumption credit and sober down valuations for most players.

In May, ET had reported that, in an early indication of severe stress in nearly all consumer and small businesses portfolios, bounce rates at country’s leading tech-enabled non-bank lenders had nearly tripled in April, even as a significant portion of their loan books are under moratorium.

PaySense, which was founded in 2015, uses data science to provide personal, vehicle and consumer loans, as well as marriage, travel, medical emergency and home improvement loans. Co insurers can apply for loans up to Rs 5 lakh through their phones or the website.

The company, which operates out of 11 cities, according to its website, has tied up with leading non-banking financial companies, including IIFL, Northern Arc and Fullerton India.





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