Indian ride-hailing company Ola has signed an agreement to acquire neo-banking platform Avail Finance to bolster its financial services offering.

Ola, which owns a 9% stake in Avail Finance, did not disclose the financial details of the deal. However, Moneycontrol reports that the transaction is valued at $50m.

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Ola plans to leverage Avail Finance’s product portfolio to bolster its lending business and further Ola’s plans of expanding its neo-banking offerings.

Ola said: “The acquisition is a key step in Ola’s broader push into the fintech space as it looks to build a mobility-focused financial services business under Ola Financial. With this acquisition, Ola Financial Services will further strengthen its play in the credit underserved segments that comprise blue-collar workers such as Ola’s driver-partner ecosystem.”

Notably, Avail Finance was founded by Ankush Aggarwal, who is Ola co-founder Bhavish Aggarwal’s brother.

The fintech’s service portfolio includes personal loans, savings and salary advances for blue-collar workers.

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“Avail has been struggling as its lending business was hit during the pandemic, it also laid-off employees. The merger is a lifeline from Bhavish. Some investors were apprehensive about pushing this through because it would become a related party transaction. But Bhavish only needs a simple majority and will be able to push the deal through,” a source was quoted by Moneycontrol as saying.

As per Ola’s announcement, the deal is yet to receive approval from the shareholders.

In November 2021, it was reported that Avail Finance was in talks to buy neo banking platform YeLo, which will give it access to an NBFC licence.