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PayU to acquire BillDesk for $4.7N – most expensive acquisition deal in startup space

India’s startup industry has just witnessed one of its biggest acquisition deals, with Prosus backed PayU finally agreeing to buy BillDesk for staggering $4.7 bn. The PayU’s board of director has given principal approval to acquire 100% stake in BillDesk, while the deal will remain subjected to regulatory approval.  

Since the last one month the industry and rumor mills were buzzing with reports that PayU was in talks to buy the payment solution company BillDesk. While these reports were eventually vindicated with an official announcement today, this announcement will shakeup India’s fintech payment industry like never before.     

This $4.7 bn acquisition deal will result in one of the biggest investor exits that India’s startup industry has ever witnessed. In all possibility, BillDesk’s investors including Visa,  General Atlantic and Master Card will get an exit that will surpass the exits clocked in other high-profile acquisition deals. Particularly the recent acquisition of Akash Education Services by Byju’s for $950 Mn.

Following this acquisition, Prosus’s cumulative investment in the Indian tech space has now  reached to more than US$10bn. The acquisition will also make PayU one of the leading online payment providers globally, handling a total payment volume (TPV) of US$147 bill.

Before this high-profile acquisition, Payu had acquired digital credit card payment in 2020 for $185 Mn and CitrusPay in 2016 for $160 Mn.

PayU’s latest acquisition also bodes well in the wake of the fact that digital retail payment is likely to grow relentlessly in the coming years. Reserve Bank of India’s (RBI) annual FY21 report estimates that in next three years more than 200 million new users will adopt digital payments. The average annual transactions per capita will be rising tenfold from 22 to 220, the report further claimed.

PayU and BillDesk’s Official Comments on the acquisition  

Laurent Le Moal, CEO of PayU, said: “We believe this transaction will stimulate both innovation and competition within India’s digital payments industry. This will not only help to strengthen India’s digital economy, but also bring financial services to those who may have historically been excluded. This ambition is fully aligned with the Government of India’s vision of ‘Digital India’ and is a key objective for PayU across all the communities we serve globally.

“This deal is an example of how our purpose and our business objectives work together, accelerating growth and increasing access to financial services.”

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.

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