December 2, 2024: Global investment giant Prosus has made two key acquisitions in October 2024, further expanding its foothold in the country’s rapidly growing housing finance and fintech sectors. With investments totaling around $180 million, Prosus has acquired an 8.4% effective stake in Vastu Housing Finance Corp Ltd and a 10.65% stake in Mintifi, two leading players in their respective industries.
Prosus’ Strategic Investment in Vastu Housing Finance
Prosus, renowned for its keen eye on high-growth markets, acquired an 8.4% effective stake (7.8% fully diluted) in Vastu Housing Finance Corp Ltd, a prominent Indian housing finance company, for approximately $100 million. Founded in 2015 by Sandeep Menon and Sujay Patil, Vastu has quickly grown into a key player in India’s housing finance market, establishing over 230 branches across 13 states.
The strategic acquisition aligns with the global consumer internet group and one of the largest technology investors and operators in the world broader investment strategy, aiming to tap into India’s large and expanding housing market. Vastu’s commitment to providing affordable housing finance in a country with a significant housing shortage has proven attractive to global investors. As part of this deal, Prosus will account for the investment as an equity-accounted associate due to its substantial influence on the company’s board of directors.
Vastu’s earlier funding rounds, including a secondary sale that raised $30 million, helped fuel its rapid expansion and solidified its position as a key player in India’s housing finance space. The addition of Prosus as a strategic partner positions the company for even more robust growth in the coming years, driven by both the increasing demand for housing and the expanding middle class in India.
Mintifi Acquisition: A Strategic Bet on India’s Fintech Growth
Along with the Vastu acquisition, Prosus also made a strategic $80 million investment in Mintifi, an innovative supply chain finance fintech, securing a 10.65% stake in the company.
Mintifi, which is revolutionizing supply chain financing for small and medium enterprises (SMEs) in India, has quickly emerged as a frontrunner in the fintech sector. With the backing of the technology investment group, Mintifi is set to strengthen its position as a leader in providing financial services that help businesses unlock working capital and optimize their supply chains.
This acquisition comes at a time when India’s fintech landscape is experiencing explosive growth. Prosus, with its deep expertise and resources, is positioning itself at the heart of this fintech revolution, leveraging its stakes in Mintifi to capitalize on India’s fast-growing digital financial services sector.
Prosus’ Growth Story: A Focus on India’s Expanding Digital Economy
The recent acquisitions are part of a larger strategy by the technology investment group to diversify its portfolio and tap into India’s dynamic digital economy. Prosus’ PayU India, a leading payments platform, has also shown impressive growth, reporting a 12% year-on-year (YoY) increase in revenue for H1 FY25, driven by an expansion in payment volumes and the onboarding of new merchants.
With over 5 lakh businesses in its portfolio, PayU is benefitting from an in-principle approval from the Reserve Bank of India (RBI) to operate as a payment aggregator.
This robust growth reflects the overall upward trajectory of India’s fintech and payments sectors, presenting the technology investment group with an opportunity to capitalize on the digital transformation taking place in one of the world’s largest and most rapidly evolving markets.
Implications of Prosus’ Investments
The technology group investments’ in Vastu Housing Finance and Mintifi underscore the growing importance of India in the global investment landscape. These acquisitions not only demonstrate Prosus’ confidence in India’s burgeoning fintech and housing sectors but also position the company for long-term growth in a market that is expected to remain one of the world’s most attractive for investors.
As India continues to expand its middle class and digital economy, the potential for companies like Vastu and Mintifi to scale up is immense. For the global investment giant, this marks a bullish outlook on both the housing finance and fintech industries in India, which are poised for significant growth over the next decade.
With these strategic acquisitions, Prosus is well-positioned to further enhance its portfolio in key high-growth sectors, strengthening its position as a leading global investor in the digital economy.
