Prosus-backed fintech firm PayU is set to acquire India's earliest payment gateway BillDesk for $4.7 billion in what is seen as the biggest M$A deal in India's fintech space.
Prosus, the global consumer internet group and one of the largest technology investors in the world, said in a filing that the value of the net assets that are part of the acquisition was $256.9 million (around Rs 1,927.5 crore). The profit after tax for the year ended March 31, 2021, was $36.8 million (around Rs 270 crore).
In a statement, Bob van Dijk, Group CEO of Prosus, said: "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 $6 billion in Indian tech to date, and this deal will see that increase to more than $10 billion."
A look at India's digital payment space justifies Protus's acquisition of Billdesk. The 2020-21 RBI's annual report shows that the number of transactions for digital retail payments grew more than 80% to 44 billion to 2020-21 from 24 billion in 2018-19. The Covid-19 pandemic resulted in a surge in online transactions. RBI expects more than 200 million new users to adopt digital payments over the next three years, with average annual transactions per capita rising 10-fold to 220 from 22 now.
BillDesk, which was founded in 2000 by former consultants M N Srinivasu, Ajay Kaushal, and Karthik Ganpathy, is among the largest payment gateway aggregators in the country, handling more than half of all online billing transactions, according to industry estimates.
The deal will give an exit to BillDesk's institutional investors — General Atlantic, Temasek Holdings, Visa, TA Associates, March Capital, and Clearstone Venture Partners — in addition to the three co-founders, who together held 29.6% share in the company as of March 31, 2020. The deal is subject to regulatory approval, including from the Competition Commission of India
"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," Srinivasu said.