Prosus Ventures said earlier today that it would acquire Indian payments gateway firm BillDesk for $4.7 billion to boost its fintech business PayU.
Context: When the deal goes through, it will be one of the biggest acquisitions in India’s digital payments space. It comes at a time when the digital payments ecosystem is seeing huge traction, with many Indians taking to online payment modes for the first time.
The acquisition also comes just ahead of the Reserve Bank of India’s upcoming regulatory regime for payment aggregators and payment gateways. The new rules are expected to tighten regulatory supervision of payment system intermediaries.
After the acquisition, the combined entity will emerge as the leading online payments providers globally and in India by total payment volume (TPV), Prosus said in a statement.
Srinivasu of BillDesk said the investment by Prosus “validates the significant opportunity in India for digital payments which is being propelled by innovation and the progressive regulatory framework put into place by the Reserve Bank of India”.
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.”
Success story: Founded in 2000 by three former Arthur Andersen executives — M N Srinivasu, Ajay Kaushal and Karthik Ganapathy — BillDesk is one of the very few profitable internet companies in India.
It competes with the likes of PayU, CCAvenue and a clutch of younger startups such as Razorpay. The company has the largest roster of business clients of any payment gateway in India and handles 50-60% of billing transactions.
Source: Economic Times