PayU Acquires BillDesk For $4.7 Bn In India’s Biggest Fintech Deal

Prosus, a global consumer internet group that operates fintech company PayU announced that PayU will be acquiring Indian payments gateway company BillDesk for $4.7 Bn. The said deal is the largest acquisition in India’s digital payments space. 

Post the acquisition, PayU and BillDesk will emerge as one of the leading online payments providers globally in terms of total payment volume. The deal is awaiting approval from India’s anti-competition watchdog Competitive Commission of India.

BillDesk was founded in 2000 by three former Arthur Andersen executives — M N Srinivasu, Ajay Kaushal and Karthik Ganapathy, BillDesk offers payment gateway solutions. The company pits against the likes of Razorpay, Citrus Pay, and others. The Mumbai-based company is backed by Visa, TA Associates, General Atlantic, venture capital firm Clearstone Venture, and Singapore’s state-held investor Temasek Holdings. 

BillDesk is also one of the few profitable companies in the country’s fintech space. The fintech giant recorded a net profit of INR 23,152 Lakh in FY 20 as against INR 15,190 Lakh in FY 19. The company posted revenue INR 134,190 Lakhs in FY 20 as compared to INR 105,958 Lakh in the previous financial year, according to Tofler. The company also saw its total expenses grow from INR 87,609 Lakh in FY 19 to INR 113,209 Lakh. 

Despite being profitable, BillDesk’s singular payment gateway solution was facing heat from end-to-end payment options offered by TechProcess Payment Services, Razorpay, Airpay, Oxigen, PayUbiz, Paytm, Instamojo, CCAvenue, PhonePe among many others. 

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.

BillDesk will be the fourth major acquisition by PayU in India. Prior to BillDesk: 

• PayU had acquired CitrusPay for $130 Mn in 2016. 
• In 2019, it acquired payment and security firm Wibmo for $70 Mn in 2019. 
• Last year, Prosus acquired a controlling stake in a digital credit platform – PaySense for $185 Mn.

All these acquisitions can be seen as a way for PayU to consolidate its market presence in the country. 

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