In a move that has caught the attention of both the fintech and traditional banking sectors, Indian fintech unicorn Slice has announced its merger with Guwahati-based North East Small Finance Bank (NESFB). This decision comes after Slice’s gradual acquisition of a 10 per cent stake in NESFB over recent quarters.
According to reports, the merger aims to expand financial inclusivity by reaching consumers who currently lack basic banking services. Slice CEO Rajan Bajaj commented, “Our unyielding devotion to customers and robust risk management have set us apart. This approach allows us to serve a wider audience, including those often overlooked.”
This unprecedented move follows a turbulent period for fintechs in India. Last year, the Reserve Bank of India (RBI) released a series of guidelines impacting many fintech companies. It specifically affected the ways firms could issue cards. Notably, Slice had been working closely with NESFB for the past year, gaining a better understanding of banking operations and the possible synergies between the two entities.
Previously valued at about $1.5 billion, Slice has attracted major investors like Tiger Global, Insight Partners, and Blume Ventures. On the other side, NESFB was last valued at about $68 million. Industry insiders reveal that at least two investors are already in talks to invest around $125 million in the newly merged entity.
Vikram Chachra, general partner at 8i Ventures, an early backer of Slice, heralded the merger as “a defining moment in India’s fintech journey.”
While exact financial details of the merger are yet to be disclosed, preliminary reports suggest a fair market value of ₹11,700 crore for Slice and over ₹450 crore for NESFB. A quick calculation implies that Slice’s shareholders would likely own 95-97 per cent of the merged entity, with the remaining 3-5 per cent owned by NESFB shareholders.
This merger signifies a shift in how fintech and traditional banking entities can coexist and collaborate. It also suggests a future where digital-first services are tightly interwoven with grassroots banking operations.
The merger still requires shareholders’ consent and regulatory approvals, but it is poised to combine Slice’s digital capabilities with NESFB’s foundation in grassroots banking.
The merged entity aims to supercharge its product offerings and accelerate product iterations to serve a growing digital consumer base in India. This partnership could be the blueprint for future fintech-banking collaborations, offering a new pathway for India’s 600 million smartphone users to access financial services.
