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Prosus NV has agreed to acquire Indian online payment service BillDesk for 345 billion rupees ($4.7 billion), the largest global acquisition ever in the Asian nation.
European investment powerhouse’s PayU unit has struck a deal to buy the 11-year-old startup, the digital payments giant with a total amount of $147 billion. The company said in a statement that it will take Prosus’ investment in India to more than $10 billion so far.
Prosus, whose biggest investment is Tencent Holdings Ltd. It is on the verge of taking off, will enter the Indian payments sector. Prosus cited estimates of the Indian central bank that over 200 million people will adopt digital payments in the next three years, leading to a 10-fold increase in annual transactions per capita.
The Prosus deal could intensify competition in the acrimonious sector. Hundreds of startups from BillDesk to Walmart Inc.’s PhonePe and Ant Group company-backed Paytm are incentivizing customers with everything from micro-loans to gold trading. BillDesk, backed by Visa, was one of the pioneers of online payments in India along with larger rival Paytm. Its services are particularly common among retailers in the country.
Investor interest in India fast As Beijing is running a campaign to rein in tech sectors ranging from online commerce and fintech to gaming.
Unlike China, where online usage is highly developed, many of India’s 625 million Internet users are finding their feet in the worlds of video streaming, social networking and e-commerce. Online shopping opportunities are particularly attractive, as e-commerce accounts for less than 3% of retail transactions. Tech startups in India are still paying to build supply chains and distribution networks.
India saw $6.3 billion in funding and deals for technology startups in the second quarter, according to data from research firm CB Insights, while funding to Chinese companies fell 18% from a peak of $27.7 billion in the fourth quarter of 2020.
According to data compiled by Bloomberg, the acquisition will be Prosus’ largest Stack Exchange Inc investment to date. Prosus said its PayU unit grew total payment volume by 51% to $55 billion in the year ended March.
Prosus was spun off from Naspers Ltd in 2019 to diversify away from South Africa and give investors a more direct exposure to its broader portfolio of tech businesses. Cape Town-based Naspers was an early-stage investor in Tencent and has tried to close the valuation gap for years as the value of the Chinese business has risen.—bloomberg
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