PayU To Acquire Rival Citrus Pay In An All Cash Deal, Might Close Between $149-$179 Mn

Naspers-backed PayU, a Gurgaon-based payment service provider, is in talks to acquire FinTech company Citrus Pay. The deal is expected to be somewhere between  $149 Mn (INR 1000 Cr) to $179 Mn (INR 1200 Cr) and will be closed by the end of September this year.

Investec, an international asset management group, is acting as an adviser to Citrus Pay for this deal. Post acquisition, Citrus Pay will be completely absorbed by PayU. Also, there are speculations that Naspers will pump in an additional $30-40 Mn in the company.

Sequoia Capital, which holds a 25% stake in CitrusPay, will be exiting post this deal along with other investors such as Ascent Capital and Japanese strategic investors Beenos and econtext Asia. As mainstream media estimates, Sequoia will make about a six-fold return on its $10 Mn investment in Citrus Pay.

Based in Mumbai, Citrus Pay was founded by Jitendra Gupta and Satyen Kothari in 2011. In June this year, it also launched a contextual commerce platform, Sellfie, that enables individuals and small businesses to sell and collect payments on social networks and instant messengers using buy buttons, payment links, and chat bots.

In December last year, the company hived off its mobile app Cube into a new entity with Kothari leaving to head the new startup. It also acquired Bangalore-based payment platform Zwitch for an undisclosed amount in October 2015.

Citrus Pay has so far raised $33 Mn in four rounds of funding – undisclosed amount in Seed funding in 2012, $2 Mn in Series A in 2012, $5.5 Mn in Series B, 2013, and $25 Mn in Series C in 2015. It has 1100 merchants on board with a userbase of 21 Mn and has processed transactions worth $2.5 Bn annually.

Its clients include companies like TinyOwl, Grofers, JetAirways, PVR, MakeMyTrip, Zivame, Faasos, Pepperfry, Shopclues and more. It also has tie-ups with over 33 banks, with offices in Pune, Delhi, Gurgaon and Bangalore, and Mumbai.

Earlier this year, Naspers also invested $250 Mn in the Ibibo Group, raising its stake to 90%. Also, in June, PayU revealed its plans to double the total value of transactions processed to $1 Bn per month in the next one year, backed by boost in volumes from offline and online partnerships.