In a major fintech takeover, CCI approves PayU’s $4.7 billion acquisition of BillDesk
The Competition Commission of India (CCI) has given its nod for the $4.7 billion acquisition of online payment gateway provider BillDesk by Prosus-backed PayU India. This is the largest combination ever approved by the fintech competition watchdog.
This acquisition, which was announced last August, will see PayU, the payment and fintech business of Prosus operating in more than 20 markets, become a leading online payment provider globally by payment volume. This deal will also take Prosus investments in India to over $10 billion.
“Commission approves acquisition of 100 percent share capital of IndiaIdeas.com (BillDesk) by PayU Payments”, CCI tweeted on Monday evening.
The combination approved by the CCI was related to the acquisition of 100 per cent share capital of Indiaideas.com Limited (IIL), which is an unlisted company using the name “BillDesk” as its trade/business/brand name in India, by PayU Payments Private Ltd (PayU India).
The shares in PayU India are indirectly owned by Prosus NV (Prosus), which is a Euronext Amsterdam-listed global consumer internet group and one of the leading technology investors in the world.
IIL primarily offers payment aggregation services that enable merchants (and other entities) to receive payments from their customers across various digital payment methods.
BillDesk was founded in 2000 by MN Srinivasu, Ajay Kaushal and Karthik Ganapathy and was backed by investors. including Clearstone, Visa and Temasek.
For Prosus, India remains its most important investment destination, with classifieds, food delivery and education technology in addition to payments and fintech as core segments.
Besides payments and financial services, Prosus had, among other things, invested in the ed-tech leader Byju, the food delivery platform Swiggy and the home service company Urban Company.
CCI scrutiny
This BillDesk deal is significant as it is one of the few where the CCI had issued a notification of a combination.
The CCI had in late July sent a 30-page notice claiming that the combination is likely to cause an appreciable adverse effect on competition (AAEC) and sought an explanation from PayU as to why a Phase II investigation (thorough investigation) should not be launched on the agreement.
The competition watchdog had last Friday held an oral hearing of the parties concerned about the response they had given to the notice.
Biz performance
In 2021-22, PayU India’s revenue grew 48 percent to $304 million, led by growth in total payment volumes.
TPVs in India grew 65 percent to $43.8 billion, with growth driven by diversification of the merchant portfolio into segments such as financial services, e-commerce and bill payments, offsetting the lower volumes from categories impacted by Covid-19.
PayU India operates across three businesses – payments for domestic and cross-border transactions, credit solutions for consumers and small businesses, and strategic investments in fintech companies.
PayU India’s credit-linked Visa card offering LazyCard was launched in December 2021 and recorded total loan disbursements of $586 million till March 2022.
Published on
5 September 2022
