Prashanth Ranganathan’s new venture in talks for $20-25 million

Synopsis Ranganathan, who left Prosus-owned PayU earlier this year, is currently on gardening leave. His new venture will likely be in the wealthtech space. Agencies Prashanth Ranganathan, CEO, PayU Finance Former PayU Finance India chief executive Prashanth Ranganathan has held talks with investors to raise $20 million to $25 million for his new venture, multiple people aware of the discussions told ET.

Ranganathan, who left Prosus-owned PayU earlier this year, is currently on gardening leave. His new venture will likely be in the wealthtech space and will allow Indian parents to save funds across various financial instruments to help with their child’s tertiary education. Founder of consumer lending venture PaySense , which was sold to PayU for $185 million in January 2020, Ranganathan has engaged with venture firm Nexus Venture Partners along with a couple of US and Singapore-based funds to invest in the round, two people said requesting anonymity.

Nexus was an investor in PaySense. While the final contours of the deal are yet to be decided, the round is currently being discussed at a valuation of almost $100 million, three people said. The discussions are still at an early stage, the people said.

“Ranganathan has approached Nexus with the deck for his new startup. The venture is likely to be at the intersection of education and wealth, where it will assist parents to save systematically towards their child’s education abroad. The talks with investors are still at a very formative stage and things will be much clearer post October,” said one of the people.

Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories ET had first reported on August 25 that Ranganathan had quit PayU. Queries sent to Nexus Venture Partners did not elicit a response until press time on Sunday. Ranganathan declined to comment.

PayU’s acquisition of PaySense was ranked among one of the large domestic cash exits for Nexus. The venture firm held roughly 23% stake in PaySense before its acquisition by PayU. If the deal goes through, it will be among the largest early-stage funding rounds in the past year or so amid the current downturn.

Ranganathan is expected to officially move out from PayU in October and is likely to launch his second venture by February, next year. “The startup may have a lending play at a later stage as it sets up the wealth management vertical, for which he (Ranganathan) may apply for a registered investment advisor licence,” said one of the people ET spoke with. As a part of his stint at PayU, Ranganthan was instrumental in scaling up the local credit business, Lazypay, for the Amsterdam-based fintech major.

PayU India currently supports 2 million customers and over 450,000 merchants in areas such as lending and digital credit products. Prosus, while announcing its annual results recently, said that PayU’s credit business in India was close to break even. In the past, Indian startups such as EduFund and Rupiyaa have been focused on helping parents save dedicated corpus towards their child’s education.

In May this year, EduFund raised $3. 5 million as a part of its pre-Series A round led by venture capital firm MassMutual Ventures. Don’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp.

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