PayU terminates $4.7b acquisition of India's BillDesk
The USD 4.7bn acquisition of Indian payments app BillDesk by industry peer PayU – which was poised to facilitate exits for the likes of TA Associates, General Atlantic, and Temasek Holdings – has collapsed.
Prosus, an investment arm of South African technology conglomerate Naspers and the owner of PayU, said in a statement that certain conditions were not met by the September 30 deadline, prompting automatic termination of the deal. The transaction had already been approved by the Competition Commission of India (CCI).
PayU agreed to buy BillDesk in September 2021 amid a boom in payments M&A in Asia. Around the same time, US financial technology giant Square – now known as Block – announced a USD 29bn acquisition of Australian buy now, pay later player Afterpay and PayPal picked up Japan-based Paidy for USD 2.7bn. Both deals enabled VC investors to exit.
Since then, the once-booming technology sector has been hit by a string of selloffs in the public markets. The decline in valuations has to some extent filtered through to private markets.
Founded in 2000, BillDesk provides integrated payment solutions to enterprise, government, and start-up customers. It serves as a payment channel aggregator, a technology stack connected to the Bharat Bill Payment System (BBPS), India’s national bill payments platform, and a recurring payments provider through links to credit cards and India’s unified payments interface (UPI).
The company facilitated about USD 90bn in payments in the 2021 financial year and claims its app is used more than 100m times a day. Revenue for the 12 months ended March 2021 was INR 19.3bn (USD 236.4m), up from INR 13.4bn the previous year. Over the same period, net profit rose from INR 2.3bn to INR 2.7bn.
On announcing the acquisition, PayU said its India unit and BillDesk ran complementary businesses in the local digital payments space, and that together, they would create a financial ecosystem handling 4bn transactions a year.
BillDesk has raised more than USD 240m in private funding across five rounds, according to AVCJ Research. The most recent of these came in 2019, with Temasek Holdings and Visa committing USD 84.4m. In 2016, General Atlantic took a 20% interest for USD 120m, while Temasek paid USD 30m for 5%. TA Associates acquired a minority stake for an undisclosed sum in 2012.
Early backers include Clearstone Venture Advisors, which invested USD 5m in 2006. Government-controlled SIDBI Venture Capital took a 16% stake for USD 500,000 in 2001 but later sold its position.
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