PayU in Talks to Procure BillDesk for a Deal of $4 billion
Nasper-backed fintech major PayU has initiated dicussion to acquire domestic payment gateway major BillDesk, and the deal size is expected to be in the range of $3-4 billion.
“BillDesk has been open to being acquired for some time now, but in the past the valuations that the company was seeking proved to be a hurdle. “Three years ago too, PayU had approached BillDesk for an acquisition, but things didn’t go ahead due to high valuations. BillDesk had asked for $2-billion value then,” says a source.
A partner at a venture capital fund with investments in several fintech start-ups says, “If the deal happens, it will be a shot in the arm for PayU, which will be able to capture the entire end-to-end payments ecosystem.”
Another source from the fintech industry states, “Billdesk is a very profitable and well-managed company. Its foray in the government segment is the strongest, and has an enviable technology back-end. Whoever acquires it will be surely getting access to good business.”
Mahesh Singhi, founder & MD, Singhi Advisors says, “The Paytm IPO is creating momentum in the fintech space and several M&As (mergers and acquisitions) are likely to happen in the coming few months.”
According to the company’s website, BillDesk’s investors include TA Associates, Clearstone Ventures, General Atlantic, and Temasek. It also says BillDesk is India’s largest institution, and its technology, payments services and its extensive processing network are used by India’s largest banks and many of India’s organizations across diverse industry segments such as telecom, insurance, utilities, financial services, education, entertainment and e-commerce businesses. The BillDesk platform processes a majority share of the online and mobile payments transactions that are conducted through aggregator platforms in India.
The integration of payment gateway has become one of the most critical aspects of every industry. It allows collecting money through the customer's preferred bank without compromising sensitive data. The Indian payment gateway market is expected to register a compound annual growth rate of 15 per cent over 2020-2025, according to a report by ResearchandMarkets.com.
