In largest payment deal PayU parent acquires BillDesk for $4.7 billion – Times of India

MUMBAI: In a deal that will make PayU the biggest online payment provider in India, its parent Prosus has said that it will acquire payment company BillDesk for $4.7 billion.
This is the largest deal in the Indian payment space. It is in keeping with international trends. Earlier this month Jack Dorsey co-founded Square had acquired `buy now pay later’ payment company Afterpay for $29 billion.
A pioneer in the payment gateway space, BillDesk, was founded in 2000 by M Srinivasu, Ajay Kaushal and Karthik Ganapathy. The acquisition was announced by Netherland-based Prosus which holds, South African internet and media giant Nasper’s fintech, e-commerce and other international investments including PayU.

According to a filing by IndiaIdeas.com, as of March 31, 2020 the company that owns Billdesk brand, General Atlantic, holds 14.8% stake and Visa International is the second largest investor with 13.12%.
The promoters Srinvasu, Kaushal and Ganapathy hold 11.39%, 10.59% and 8.84% respectively. The other large private equity investors are Temsasek subsidiary Claymore Investments (13.12%), TA Associates‘ arm Wagner Limited (13.66%) and Clearstone Venture (6.68%)
With this deal, PayU’s combined investment over the past five years crosses $5 billion. The combined entity will have a total payment value of $147 billion and increase the number of transactions managed by PayU fourfold to 4 billion. For the investors, BillDesk has been a derivative play on the growth of e-commerce in India. The acquisition besides giving PayU scale provides it with an opportunity to offer value-added services like analytics and artificial intelligence.
Naspers has built a large presence in the online space through a spate of acquisitions including Redbus and CitrusPay in 2016 for $130 million.
“We have a long and deep relationship with India, having supported and partnered with some of its most dynamic entrepreneurs and new tech businesses since 2005. We’ve invested close to US$6 billion in Indian tech to date, and this deal will see that increase to more than $10 billion,” said Bob van Dijk, Group CEO of Prosus in a statement. “Along with classifieds, food delivery, and education technology, payments and fintech is a core segment for Prosus, and India remains our number one investment destination,” he added.
Laurent Le Moal, CEO, PayU said that the acquisition will help stimulate innovation and competition and also promote the government objective of financial inclusion. According to the FY21 annual report of the Reserve Bank of India (RBI), the number of transactions for digital retail payments has grown by more than 80% from 24 billion in 2018-19 to 44 billion to 2020-21.
M N Srinivasu, Co-founder of BillDesk, said: “BillDesk has been a pioneer in driving digital payments in India for well over a decade. This investment by Prosus validates the significant opportunity in India for digital payments that is being propelled by innovation and the progressive regulatory framework put into place by the Reserve Bank of India, India’s central bank”.
The deal size reveals the appreciation in value the company has seen in the last few years. Visa’s minority stake investment in the company valued it at $1.8 billion as recently as November 2018. Online payments have received a big boost first in the push to digital payments following demonetisation and more recently after the Covid-19 pandemic emphasized social distancing. To put things in perspective some of the very large lenders like Canara Bank have a marketcap of below $4billion.