Extra main consolidation underway on this planet of funds: Prosus — the Dutch tech big that bundles collectively Naspers’ fintech, e-commerce and different worldwide investments and companies outdoors of South Africa (together with a giant stake in Tencent) — immediately introduced that it could pay $4.7 billion to accumulate BillDesk, a funds supplier out of India. Prosus plans to mix BillDesk with PayU, its present international fintech and funds enterprise, which already has a powerful presence in India. The deal has been rumored to be within the works since about July.
The acquisition will make PayU one of many larger on-line cost suppliers globally with some $147 billion in cost quantity yearly. However the acquisition just isn’t solely a major consolidation transfer on this planet of funds: it additionally underscores Prosus’ persevering with give attention to creating markets and particularly India. Prosus mentioned that the deal — one of many greatest ever made by Prosus, and one of many greatest M&A strikes in India — will give its fintech holdings in India a cumulative funding worth of $10 billion.
That’s a part of a long-term technique for Prosus (and Naspers) that stretches again almost a decade involving a number of other acquisitions and investments in startups within the area.
“Funds and fintech is a core section for Prosus and India stays our primary funding vacation spot,” mentioned Bob van Dijk, group CEO of Prosus, in a press release. PayU — fashioned out a mixture of assorted pursuits in fintech and funds that Naspers (after which Prosus) had acquired over a number of years, is at present lively in some 20 markets.
India represents an enormous marketplace for monetary companies, with a digitally-savvy shopper base with a quickly increasing center class with disposable revenue.
Inside that, PayU has positioned itself as a powerful participant. Particularly, it has been extremely aggressive within the Indian on-line service provider buying market – each on worth and in-field gross sales effort. PayU India has a dominant share within the funds gateway enterprise the place it historically competed with BillDesk and CCAvenue (owned partially by Infibeam).
BillDesk has been round since 2000 and its buyers had included Visa, Normal Atlantic, and the State Financial institution of India. PitchBook estimated that its valuation was round $1.53 billion in 2019 when it final raised cash. Tracxn estimated that the founders nonetheless owned just below 30% of the corporate forward of this acquisition.
BillDesk is among the many corporations that has utilized for the license of NUE, a brand new retail funds networks proposed for India that’s anticipated to compete with established UPI railroads. BillDesk has teamed with Amazon, ICICI Financial institution, Axis Financial institution, Pine Labs, and Visa for the license.
“We consider this transaction will stimulate each innovation and competitors inside India’s digital funds trade,” mentioned Laurent Le Moal, CEO of PayU, in a press release. “This is not going to solely assist to strengthen India’s digital financial system, but additionally deliver monetary companies to those that could have traditionally been excluded. This ambition is absolutely aligned with the Authorities of India’s imaginative and prescient of ‘Digital India’ and is a key goal for PayU throughout all of the communities we serve globally.”
PayU immediately mentioned that its home and cross-border funds enterprise as of March 2021 was up 51% year-on-year throughout its operations in India, Latin America and EMEA, a mark of the general growth that we’ve seen within the international digital funds market within the wake of the Covid-19 pandemic.
Different companies PayU operates embrace credit score options throughout India and 5 different markets. Prosus itself can be an lively investor, with stakes in remittance firm Remitly and others — representing a pipeline for strategic partnerships, but additionally doubtlessly future acquisitions.