When it got here to a choice on whether or not to go public or increase investments from a specialised associate to chart out the subsequent section of development for what was arguably India’s first pure play ‘fintech’ that now handles greater than half of the nation’s on-line billing transactions, co-founders of BillDesk MN Srinivasu, Ajay Kaushal and Karthik Ganpathy, together with their different buyers, selected the latter possibility. A guess completely different to what Paytm, one among its greatest rivals within the funds gateway section, appears to have taken because it gears up for its proposed $2.2 billion IPO.
On Tuesday, Dutch conglomerate Prosus introduced 100 per cent acquisition of BillDesk for $4.7 billion. Prosus operates in India’s fintech house by its unit PayU. Post the acquisition, the 2 manufacturers will proceed to function individually a minimum of for a while, given the deep relationships every of them have with their retailers and banks. For the three co-founders, the deal presents a possibility to run their enterprise at a fair larger scale with backing of a deep-pocketed investor like Prosus, as they plan to remain on even after promoting their stakes.
Through the deal, the co-founders who began the corporate greater than 20 years in the past, discover an exit for his or her 29.6 per cent stake that they held in BillDesk, estimated to be value round $1.4 billion. The firm’s different institutional buyers have been General Atlantic, Temasek Holdings, Visa, TA Associates, March Capital and Clearstone Venture Partners.
“Both BillDesk and PayU platforms will remain in use. At the moment, we have only agreed to the deal and it is subject to regulatory approval. This deal is about growth and less about cost optimisation. For the moment, it is business as usual for PayU India and BillDesk and it is far too early to discuss organisational structure,” a PayU spokesperson mentioned. “The existing PayU India management team will remain in charge. However, they will, post-closing, be able to draw on the 20+ years of expertise provided by the leadership of BillDes,” they added.
While Srinivasu is an alumnus of IIM Ahmedabad, Kaushal holds a level from IIM Lucknow and Ganpathy from IIM Bangalore. The three have been colleagues at consulting agency Arthur Anderson in Mumbai. Ganpathy was the primary to affix the consultancy in 1995, adopted by Kaushal in 1997 and Srinivasu in 1999. But on the flip of the millennium, they determined to stop the agency and start their entrepreneurial journey.
Right earlier than they began BillDesk, in 1999, a number of massive banks within the nation have been rolling out core-banking options to allow their clients to avail of companies with out visiting their residence branches. Eventually, a plan was chalked out to focus on the funds ecosystem, through which BillDesk can be the bridge between banks and numerous retailers — on the time this was primarily utilities comparable to electrical energy boards, phone firms, water boards, and so forth. In this case, the shopper acquisition was left to retailers or banks and BillDesk would make a fee from these retailers or banks on every transaction.
In 2001, the corporate launched its Electronic Bill Presentment and Payment product with state-owned Bank of Baroda and in 2003, it launched the funds aggregation system that may carry collectively a number of completely different choices to transact on-line. Only a number of years later, the corporate turned worthwhile, and in 2019 it hit a cumulative cost quantity of Rs 3 trillion. Today, BillDesk handles greater than half of the nation’s on-line billing transactions. PayU expects that the group entity put up the deal would deal with over $147 billion in annual transaction volumes, whereas at the moment BillDesk already handles $90 billion transactions a 12 months.
