PayU all set to buy BillDesk for $4.7 bn, the largest acquisition in Indian digital space

PayU backed by Prosus, a fintech firm, will acquire payment gateway BillDesk for $4.7 billion. The entire transaction will be entirely in cash. This will be the country’s largest acquisition in the digital space.

The deal will also give exit to investors General Atlantic, TA Associates, Temasek, Clearstone Ventures, and Visa.

This acquisition will help PayU to become one of the leading online payment providers globally by total payment volume (TPV). Together, PayU and BillDesk will have a total of 4 billion transactions annually.

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), and the profit after tax for the year ended March 31, 2021 was $36.8 million (around Rs 270 crore).

The deal is also significant for Prosus as its investments in India over the last five years touched $10 billion.

“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.

We are excited about what the two great teams at BillDesk and PayU can deliver together as a driving force within the evolving digital payments landscape in India,” said Srinivasu, co-founder, BillDesk.

The transaction is subject to approval from the Competition Commission of India (CCI). The transaction builds on the basis of previous successful acquisitions by PayU in India, including CitrusPay, Paysense, and Wibmo.

CEO of PayU India Anirban Mukherjee said that as PayU has presence in more than 20 markets Prosus may also take BillDesk to international markets.

“Our growth in the payment and credit segments has been organic, but we have invested in companies as well, whom we can now bring to our platform to offer new services,” Mukherjee said.

For instance, PayU recently invested $12 million in Indiagold, a gold-focused alternative credit platform.

On the future road map, Mukherjee said they would take time on how these two platforms come together.

“We will be very thoughtful about it. How do we combine these two platforms, but we will certainly start off by offering merchants on both the platforms access to new offerings,” he added.