More major consolidation underway in the world of payments: Proses — the Dutch tech giant that bundles together Naspers’ fintech, e-commerce, and other international investments and businesses outside of South Africa — today announced that it would pay $4.7 billion to acquire BillDesk, a payments provider out of India. The deal has been rumored to be in the works since about July. Proses plans to combine BillDesk with PayU; its existing global fintech and payments business already has a strong presence in India.
The acquisition will make PayU one of the more prominent online payment providers globally, with some $147 billion in payment volume annually. But the purchase is a significant consolidation move in the world of payments: it also underscores Prosus’ continuing focus on developing markets, specifically India. Proses said that the deal — one of the biggest ever made by Proses and one of the most significant M&A moves in India — would give its fintech holdings in India a cumulative investment value of $10 billion.
That is part of a long-term strategy for Proses (and Naspers) that stretches back nearly a decade, involving several other acquisitions and investments in regional startups.
“Payments and fintech is a core segment for Proses, and India remains our number one investment destination,” said Bob van Dijk, Group CEO of Proses, in a statement. PayU — formed out of various interests in fintech and payments that Naspers (and then Proses) had acquired over several years, is currently active in some 20 markets.
India represents a massive market for financial services, with a digitally-savvy consumer base with a rapidly expanding middle class with disposable income.
PayU India has a dominant share in the payments gateway business, traditionally competing with BillDesk and CCAvenue (owned partly by Infibeam). Within that, PayU has positioned itself as a strong player. Specifically, it has been highly competitive in the Indian online merchant acquiring market – both on price and in-field sales effort.
BillDesk has been around since 2000, and its investors have included Visa, General Atlantic, and the State Bank of India. PitchBook estimated tts valuation was around $1.53 billion in 2019, when it last raised money.
BillDesk is among the firms that have applied for the license of NUE, a new retail payments network proposed for India that is expected to compete with established UPI railroads. BillDesk has teamed with Amazon, ICICI Bank, Axis Bank, Pine Labs, and Visa for the license.
“We believe this transaction will stimulate both innovation and competition within India’s digital payments industry,” said Laurent Le Moal, CEO of PayU, in a statement. “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 aligns with the Government of India’s vision of ‘Digital India’ and is a key objective for PayU across all our global communities.”
PayU today said that its domestic and cross-border payments business as of March 2021 was up 51% year-on-year across its operations in India, Latin America, and EMEA, a mark of the overall boom we have seen global digital payments market in the wake of the Covid-19 pandemic.
Other businesses PayU operates include credit solutions across India and five different markets. Proses is also an active investor, with stakes in remittance company Remitly and others — representing a pipeline for strategic partnerships and potential future acquisitions.
