Capital Float M&A Signals Step Beyond SMB Finance

Alternative small business lending firm Capital Float appears to be deepening its footprint in the personal finance market through the acquisition of Walnut. Reports in The Times of India said the AltFin player reached a deal to acquire the personal finance management app for $30 million in cash and stock.

At present, only about a quarter of Capital Float’s business stems from consumer finance, with the rest coming from small business lending operations. Reports said the takeover of Walnut could even that division out.

Walnut lets users automatically track spending, manage account and car balances, split expenses with other peers and pay bills. According to Capital Float Co-founder Sashank Rishyasringa, Walnut’s “Prime Credit Score” offering was one of the most attractive features of the takeover target.

“Unlike traditional credit metrics, Walnut’s Prime Credit Score looks [at] alternate data sets like one’s income, purchase behavior, earning capacity and security savings,” he said. “It also looks at spending pattern via eCommerce sites, wallets, shopping, food, bills, etc. We felt their product offering was unique and would benefit us, giving us a 360-degree view of what customers need.”

Walnut Co-founder Patanjali Somayaji said in another statement, “Since we launched Walnut, we have been focused on simplifying personal finance for our users. We’re excited to partner with Capital Float as we aim to exponentially grow Walnut. Capital Float‘s strength in the online lending space will bring us a whole new set of opportunities.”

Despite the takeover signaling Capital Float’s focus on consumer finance, earlier efforts suggest the company isn’t planning to shy away from small business finance. In April, the company saw a $22 million investment from Amazon as part of its Series C funding round. At the time, Capital Float said its combined equity and debt funding would be used to finance small business loans issued on its platform.