Global private equity major General Atlantic (GA) is leading an up to $200-million, or Rs 1,300-crore, investment in online payment services provider BillDesk, as fast expanding internet penetration and growing e-commerce adoption boost digital payments in India.
The transaction is expected to value BillDesk — co-founded by three former Arthur Andersen executives M N Srinivasu, Ajay Kaushal and Karthik Ganapathy — at about $1 billion, sources directly familiar with the matter told TOI. This is the largest investment deal in the domestic final technology sector. BillDesk plans to explore inorganic growth as consolidation is likely to play out in the emerging online payment gateway sector, which has attracted quite a few recent venture-backed startups.
Mumbai-based BillDesk counts many of the country’s top utilities providers, e-commerce engines, mobile and fixed line service providers, insurance companies and banks as its clients, making it the largest payment gateway in the country. India’s online payments market is estimated at over $50 billion and is growing in robust double digits.
Singapore’s Temasek Holding will be a co-investor in the latest round of funding in the online payments firm, which competes with the likes of CCAvenue, as well as newer payments players including Pay U, Paytm, and Citrus Pay. General Atlantic will bring 70% of the money and Temasek the rest in the latest round of funding, which is expected to reach a closure in the coming weeks.
BillDesk’s Srinivasu and Kaushal did not respond while General Atlantic could not be reached immediately for a comment.
Most of the nearly $200 million will be capital infusion into the company, though a small part of it would include a secondary deal to purchase some shares from an existing investor, Clearstone Venture Partners. Global investor TA Associates is BillDesk’s single largest investor. State Bank of India, Bank of Baroda and National Venture Fund for Software and Information Technology promoted by SIDBI are its other investors.
“What’s happening is that mobile banking is growing exceptionally fast, thereby, expanding the overall online payments pie. Almost 70-80% of new e-commerce transactions are happening over the mobile. This is benefiting the payment gateways in a big way. Additionally, with the launch of payment banks, the market will further grow,” said Vineet Toshniwal, MD at Equirus Capital, a mid-market investment bank in Mumbai.
General Atlantic, spearheaded by managing director Sandeep Naik, has about $1.8 billion invested in the country. The world’s sixth largest private equity firm manages assets worth $18 billion globally, and has been one of the earliest providers of risk capital to India’s growth companies. Last week, General Atlantic acquired 21% stake in IIFL Wealth Management, a unit of IIFL Holdings, for $165 million, or Rs 1,200 crore.