VC investors to exit India's ItzCash to strategic
US-based software developer Ebix has agreed to buy a majority stake in Indian financial technology firm ItzCash, providing an exit for its VC backers including Lightspeed Venture, Matrix Partners and Intel Capital.
The deal will see Ebix acquire an 80% stake in ItzCash for $120 million in a joint venture with the company’s existing backer, the Indian conglomerate Essel Group, which will retain 20%. A sum of $76 million will be paid up front and the remainder within three years after closing. ItzCash chief growth officer Bhavik Vasa told Reuters that Matrix, Lightspeed and Intel will all make full exits.
ItzCash was founded in 2006 as a digital payments service and has since expanded into remittances, digital wallets, and corporate services including point of sale terminals. The company claims to serve 35 million customers annually across its various services and to have issued 110 million accounts to date.
Ebix hopes to help ItzCash enter new markets such as Australia and Brazil through its networks in those countries, while exploring cross-selling opportunities for existing clients of each company. ItzCash plans to launch new initiatives soon aimed at helping overseas insurance and financial services players enter India.
“Having established our leadership across payments, remittances and corporate solutions already, we will deepen our foray now in the areas of credit, insurance, and healthcare,” said ItzCash Managing Director Naveen Surya in a statement. “We are keen to replicate our proven model, technology platform and operating experience to other emerging markets for financial services.”
Intel and Matrix first invested in ItzCash in 2007, committing $10 million for an undisclosed stake. The two investors committed another $10.3 million in 2009, this time joined by Lightspeed.
ItzCash is the latest VC-backed Indian fintech firm to be sold to an overseas strategic investor. The deal resembles last year’s sale of Citrus Pay to Netherlands-based rival PayU. Sequoia Capital, Ascent Capital and Beenos exited in that transaction.
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