Making inroads into the key Indian market, the global technology giant McLaren Technology Acquisition Corp is ready to acquire a significant stake in an Indian fintech company preferably having a valuation in the range of $500 million to $2 billion.
The tech company, McLaren Tech has raised $201.25 million or about Rs 1,500 crore during its Nasdaq listing early this month for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses.
McLaren Technology Acquisition Corp (MTAC) chairman and CEO Saja Pillai said that he believes there is a fintech movement around the world as most of the unicorns have been created in the fintech and artificial intelligence category in the last five years.
“If you look at the market value that has been created in the fintech space in the last 2-3 years, it is close to $5 trillion. By far fintech is the largest category in the digital category to invest. We are looking for a fintech company which has a minimum asset valuation in the range of $500 million and upper limit of $2 billion,” Pillai said.
According to Pillai, MTAC is the second Indian-promoted special purpose acquisition vehicle to go for a listing at Nasdaq. “The company where we will invest will get the opportunity to trade at Nasdaq from Day1,” he said.
Pillai believes that there is fintech at the front end which is the retail or consumer fintech where loans, leasing, buy now pay later happen. “Next is wealth fintech, which is a significant category on its own. then you have mid-core fintech, major core fintech, institution fintech, and banking tech. We are looking at fintech that plays in all these fintech ladders,” Pillai said.
Pillai said equally valuable are the supply side of fintech which is KYC, payments, and banking as a service category and the idea of MTAC is to combine fintech assets on the fintech ladder and on the supply side as well.
“The only other country with which you can compare the scale of fintech in India is China. Very few players in the world want to go and invest in Chinese fintech companies because of a particular situation. Therefore, there is a tremendous opportunity for us,” Pillai said.
MTAC chief financial officer Rajeev Nair said that the company will evaluate fintech firms and decide on the scale of investments that it plans to make.
“Our sweet spot would be $1-1.5 billion and the upper side is $2 billion or more. This doesn't stop us from going to a $5 billion valuation company but it is unlikely that we will get that kind of valuation from India. We have $201 million sitting in the bank. We can use that once we identify a target. We will raise funds further if we require more,” Nair said.