- Domestic payment gateway BillDesk is again on the market to sell-off after it was unsuccessfully sold two years ago by its promoters.
Domestic payment gateway BillDesk is again on the market to sell off after it was unsuccessfully sold two years ago by its promoters.
The BillDesk promoters are trying to sell off the whole company this time around, following a rapidly rising rivalry in the country’s digital payment processing space and booming e-commerce industry.
This was confirmed by two people with direct knowledge of BillDesk ‘s plans, adding that BillDesk promoters and the company’s single largest shareholder, General Atlantic, have called at least eight investment bankers for talks on shortlisting a suitor.
In 2000, BillDesk was founded by M.N. Srinivasu, Karthik Ganapathy, and Ajay Kaushal.
“One round of meetings with bankers occurred early this week and next week a comprehensive plan will be discussed,” the first person said.
BillDesk has India’s largest company client roster and manages 50-60 percent of billing transactions.
“That’s like an asset that no one in India has yet been able to build. But, a full, end-to-end, the integrated payment system is needed today because extremely large global players are coming in in the payment industry, “the first person said.
On March 28, 2018, Mint announced payments gateway BillDesk was holding talks with three payment giants—PayU, American Express, and PayPal, targeting a $1.5-2 billion valuation.
According to the first guy, the promoters of BillDesk are currently talking to eight investment bankers — including Goldman Sachs, JP Morgan, and Morgan Stanley — to grant the final sales mandate.
In February last year, US-based global payment processor Visa purchased a minority stake in Billdesk worth an estimated $1.8 billion. The deal included an investment of Rs.537.06 crore for an equity interest of 2,46 lakhs at a price of approximately 21,832.04.
On the other hand, Billdesk earned from Claymore Investments Rs. 65.5 crore instead of 30,000 equity shares at the same pace.
In reality, the acquisition of stake by Visa gave BillDesk an entry into the private technology companies’ Unicorn club in India.
BillDesk promoters are in a hurry to sell off, for two reasons, given the subdued mood of the offer. First, there has been a substantial increase in demand for digital payment platforms and e-wallets embedded with e-commerce benefits over the past year, though BillDesk has remained solely as a payment gateway company allowing only website banking and merchant transactions.
Consequently, BillDesk is lagging behind today’s competition in its capacity to deliver an end-to-end payment solution package. Second, private equity investors, especially General Atlantic (the largest shareholder), also tend to be gravitating towards companies that provide more digital payment and e-commerce services to their customers.
Also, commission income for all payment aggregators, including BillDesk, has dropped and, in April, the Reserve Bank of India put all aggregators under its direct control and imposed a strict set of regulations for those firms.
In BillDesk, General Atlantic owns around 35 percent. In 2006 Clearstone had been spending $5 million. TA Associates had acquired a minority interest in BillDesk, a member of IndiaIdeas.com Ltd, in 2012.
In the past year, however, the payment services industry has grown significantly with consumer-facing players such as PayTM, Google Pay, PhonePe, MobiKwik, JioPay and other UPI-based digital payment firms competing aggressively with each other by providing not only online payment facilities but also a wide range of e-commerce services.
Bill Desk derives its importance from its wide roster of over 80 billers produced by the organization over two decades. The business manages transactions worth more than $60 billion per year and is India’s largest payment gateway service.
BillDesk competes with PayU operated by Naspers, CC Avenues operated by Infibeam and Razorpay sponsored by Tiger Global.
