NEW DELHI: Prosus NV has agreed to acquire Indian online payments service BillDesk for 345 billion rupees (US$4.7bil or RM19.5bil), making its largest global acquisition to date in the Asian nation.
The European investment powerhouse’s PayU unit has struck a deal to buy the 11-year-old startup, creating a digital payments giant with a total volume of US$147bil (RM612bil).
It will take Prosus’ investment in India to more than US$10bil (RM42bil) to date, the company said in a statement.
Prosus, whose biggest investment is Tencent Holdings Ltd, will be getting in on an Indian payments arena on the cusp of taking off. More than 200 million more people will adopt digital payments there over the next three years, fuelling a 10-fold increase in annual transactions per person to 220, Prosus said, citing Indian central bank estimates.
The Prosus deal could intensify competition in the teeming sector.
Hundreds of startups from BillDesk to Walmart Inc’s PhonePe and Ant Group Co-backed Paytm are pitching customers everything from micro-loans to gold trading.
BillDesk, backed by Visa, was one of the pioneers of online payments in India alongside larger rival Paytm.
Its services are common especially among retailers in the country.
Investor interest in India is accelerating as Beijing pursues a campaign to rein in tech sectors from online commerce and financial technology to gaming.
Unlike China, where online usage is much more developed, many of India’s 625 million Internet users are just dipping their toes into the world of video streaming, social networking and e-commerce.
Opportunities in online shopping are particularly attractive, as e-commerce accounts for less than 3% of retail transactions.
Tech startups in India are still paying to build supply chain and delivery networks.
India had a record US$6.3bil (RM26.2bil) of funding and deals for technology startups in the second quarter, while funding to China-based companies dropped 18% from a peak of US$27.7bil (RM115bil) in the fourth quarter of 2020, according to data from research firm CB Insights.
The acquisition would be Prosus’ largest to date, eclipsing its roughly US$1.8bil (RM7.5bil) Stack Exchange Inc investment, according to data compiled by Bloomberg.
Its PayU unit grew total payment volume 51% in the year ended March to US$55bil (RM229bil), Prosus said. — Bloomberg