FinAccel, the parent of Indonesian digital consumer credit platform Kredivo, said it plans to go public through a merger with NASDAQ-listed VPC Impact Acquisition Holdings II (VPCB), a special purpose acquisition company (SPAC) sponsored by Victory Park Capital (VPC).
FinAccel and the blank-check firm said they have entered into a definitive agreement for a business combination that will result in FinAccel becoming a publicly-traded company with an expected pro forma equity value of approximately $2.5 billion, according to a statement on Monday.
The deal is expected to result in over $430 million of cash on the combined company’s balance sheet, reflecting a contribution of up to $256 million of cash held in VPCB’s trust account, a $120 million concurrent private placement (PIPE) led by Marshall Wace, Corbin Capital, SV Investment, Palantir Technologies, Maso Capital, and sponsor VPC, with a concurrent equity commitment of $55 million from existing FinAccel investors NAVER and Square Peg.
“The proposed business combination has been unanimously approved by the respective Boards of Directors of Kredivo and VPCB, and is subject to approval by VPCB’s stockholders, regulatory approvals, and other customary closing conditions. The business combination is expected to close no later than the first quarter of 2022,” FinAccel said.
Kredivo provides customers instant credit financing for e-commerce and offline purchases, as well as personal loans.
With nearly 4 million approved customers today and a presence across eight of the top 10 e-commerce merchants in Indonesia, it is the largest and fastest-growing buy now, pay later (BNPL) platform in Indonesia, with plans to expand into regional markets such as Vietnam and Thailand in the near future.
“Unlike Western markets where credit is readily accessible, traditional banks in Southeast Asia have historically provided little consumer credit in our markets, which creates a large opportunity for Kredivo to tap into other credit needs, such as personal loans, and fulfill our vision of providing fast, affordable, and easily accessible credit to tens of millions of customers in the region,” FinAccel Co-Founder and Chief Executive Officer Akshay Garg said.
Chicago-headquartered global investment firm VPC and Kredivo have a long-standing relationship, with VPC providing an initial $100 million credit facility to the company in July 2020 and upsizing it to $200 million in June 2021.
VPC and its limited partners have invested approximately $30 million into the PIPE and are committed to a two-year lockup on their sponsor shares unless otherwise accelerated based on average trading performance measures beginning one year following the closing. VPCB completed its initial public offering in March 2021.
FinAccel has been backed by investors including Square Peg, Mirae Asset, NAVER, Jungle Ventures, GMO Internet, and Telkom Indonesia.
Featured image credits: Kredivo