Russian consumer electronics major M.Video-Eldorado Group announces today the full acquisition of online lending platform Direct Credit as part of its strategy to develop its “promising fintech business.” The transaction amounted to 1.3 billion rubles (nearly $18 million at the current exchange rate).
Direct Credit services will be integrated into in the group’s fast-growing OneRetail platform, both online and in traditional stores. “This will enable us to create a hybrid fintech market that is unmatched in the Russian market and that will be in high demand among our customers,” stated Alexander Izosimov, CEO of M.Video-Eldorado Group.
The group intends to “expand Direct Credit into a leading fintech provider for the entire e-commerce sector, providing online and offline lending and payment services for customers and partners.”
The acquisition will also allow M.Video-Eldorado Group to “upgrade the quality of its customer service and improve the economics of its lending products.”
Russia’s largest credit broker with a 25% share of the Russian POS lending market, Direct Credit partners with more than a dozen banks and financial organizations, with large and medium-sized retail chains and e-commerce players. These include Citilink, MTS, Ozon and Rostelecom, among others.
M.Video-Eldorado Group believes its fintech solutions — which are connected with its rapidly growing OneRetail mobile platform — have the potential of being used “across the entire Russian retail market.”
The group’s plans in this field include “the improvement of online services for consumer lending to individuals and legal entities as well as the launch of new payment instruments, payment processing solutions and subscription services.”
As people spend more of their time and money online, the line between e-commerce and fintech is blurring, notes a report just published by Dealroom.
“By building, buying or partnering, online marketplaces are rapidly embedding fintech products, from payments and Buy Now, Pay Later, to escrow, business loans and insurance. Fintech-enabled marketplaces create outsized returns compared to either fintech or marketplaces,” the report found.
