FinAccel, the parent company of Indonesian Buy Now, Pay Later (BNPL) platform Kredivo, has scrapped its plans to merge with VPC Impact Acquisition Holdings II (VPCB), a publicly traded special purpose acquisition company sponsored by Victory Park Capital (VPC).
Unfavorable market conditions was cited as the main reason for the mutual termination of the deal that valued the combined companies at approximately US$2.5 billion.
Concurrent with the agreement to terminate, VPC is leading a US$145 million private structured investment in Kredivo.
Kredivo said that it plans to consider offers to participate in such private investment round from investors who held positions in VPCB, as well as other investors that had previously committed to the PIPE.
VPC and Kredivo have a long-standing relationship, with VPC providing an initial US$100 million credit facility to the company in July 2020 and upsizing it to US$200 million in June 2021.
VPCB is considering future options, including seeking an alternative business combination.
In the event that VPCB is liquidated, Kredivo shall issue a penny warrant to VPCB providing VPCB with the ability to acquire a stake equal to 3.5% of the fully diluted equity securities of Kredivo.
Gordon Watson, Co-CEO of VPCB and Partner at VPC said,
“Unfortunately, unfavorable public market conditions and process delays outside of our and Kredivo’s control have affected our transaction timeline and made it infeasible to close the transaction under the terms of the business combination agreement.
Notwithstanding, we continue to believe in the immense market opportunity for digital consumer credit and banking services in Southeast Asia, and our continued investment in Kredivo reflects our view that the company is well positioned to deliver innovative products and capture market share over the long-term.”
Akshay Garg, Co-Founder and CEO of FinAccel said,
“While unfavorable market conditions have put a pause to our plans to go public in the near-term via the proposed business combination with VPCB, we’re pleased to deepen our relationship with VPC and other high-quality investors through a new private funding round.
We appreciate the support of our investors as we continue on the path to realizing our long-term vision and growth strategy to become a leading digital financial services platform in Southeast Asia.”