FinAccel, VPC Impact Acquisition terminate merger agreement

Indonesia’s FinAccel, which runs the buy now pay later (BNPL) platform Kredivo, and VPC Impact Acquisition Holdings II, a publicly traded special purpose acquisition company in the US, have terminated their merger agreement announced earlier.

The termination comes on the backdrop of the volatility in the US market, “triggered mostly by geopolitical tensions and rate-hike concerns”, as per a Reuters report.

The merger between FinAccel and VPC was first announced in August 2021.

Gordon Watson, Co-CEO of VPCB and Partner at VPC, said: “Unfortunately, unfavourable public market conditions and process delays outside of our and Kredivo’s control have affected our transaction timeline. They made it infeasible to close the transaction under the terms of the business combination agreement.”

Following the mutual decision, VPC is leading a US$145 million investment in FinAccel. VPC had earlier provided a US$100 million credit facility to FinAccel in July 2020 and injected another US$100 million a year later. FinAccel is also backed by Mirae Asset, Naver, Square Peg Capital, MDI Ventures, and Jungle Ventures.

VPCB is now considering future options, including seeking an alternative business combination. In the event of a VPCB liquidation, Kredivo will allow the SPAC to acquire a stake equal to 3.5 per cent of the fully diluted equity securities of the fintech firm.

Also Read: FinAccel names Akshay Garg as new group CEO, Umang Rustagi as CEO of Kredivo

Founded in 2007 and headquartered in Chicago, VPC invests in large companies as well as emerging business segments in various industries in the US and the world, which often lack access to traditional sources of capital.

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