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Fintech firm's plans foiled by change in Mauritius government and bank leadership dynamics shifting rapidly overseas now.
Tiger Global-backed fintech Jupiter Money's bid to acquire a minority stake in State Bank of Mauritius (SBM) India has collapsed. The lender decided not to move ahead with discussions, citing a change in government in Mauritius and new management at the bank as reasons for the shift in dynamics. The talks, which began two years ago, aimed to acquire a 5-9 percent stake, which was to be gradually raised to transform SBM into a fintech-first digital bank.
Jupiter's focus now is to turn a profit over the next 12-14 months before charting a new growth strategy. The company has transformed into a money management app. The initial talks valued SBM at Rs 2,000 crore, and even a 50 percent stake would have cost Rs 1,000 crore, around $110 million, a moderate round of funding for Fintechs.
The collapse of the deal is attributed to the change in leadership at SBM India, with new executives not keen on pursuing a fintech partnership. The bank's role in India is more politically driven than economically led, given Mauritius's majority Indian-origin population. Jupiter's founder, Jitendra Gupta, and SBM did not respond to queries on the status of acquisition talks.
The fintech firm's initial plan to acquire a stake in SBM was part of a larger trend of neobanks and Fintechs seeking to partner with banks or acquire small finance banks to offer digital banking services. Since the fintech firm Slice's acquisition of North East Small Finance Bank, there has been heightened interest among Fintechs to acquire a bank or small finance bank. Neobanks provide a technology layer on top of banks, delivering better and faster financial services products to customers. However, they need to partner with banks and other financial institutions to offer these products.
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