Of all the landmark events in Indian fintech, the acquisition of payment aggregator BillDesk is among the most awaited ones. Every few years, the 20-year-old company is reported to be in talks for an acquisition.
Earlier this month, Mint reported reported Livemint BillDesk plans to sell-off business for $2.5 billion Read more that BillDesk was looking to sell its entire business for $2.5 billion. In 2017, its rival PayU and American payments company PayPal were reportedly in talks to acquire it. And in 2011 2011 MediaNama BillDesk Founder Srinivasu MN Rubbishes AmEx Talks Report Read more , it was the premium card network American Express.
BillDesk is the cynosure of all eyes on two counts. For one, it is the largest payments aggregator in India—it processes payments to the tune of $80 billion per year, with over 50% market share in bill payments. It also plays a crucial part in the payments food chain, making it valuable to anyone who has payments ambitions.
With everyone, from digital services company Jio Platforms to financial services major Visa, looking to own more of the stack in which they operate, BillDesk’s allure is obvious.
As for why the company would want an exit, numerous possibilities exist.
“It’s about founder fatigue,” says an executive from a rival payments company. “If you’ve been doing the same thing for 20 years, you would want to exit too.” BillDesk’s three founders—MN Srinivasu, Ajay Kaushal, and Karthik Ganapathy—are in their early fifties.
Another payments executive wonders whether its slew of private equity (PE) investors are looking to exit. BillDesk has multiple PEs on its cap table. TA Associates invested in it as far back as 2012. Then came Singapore state-owned Temasek Holdings and General Atlantic in 2015. Combined, the three PEs hold a 35.8% stake in the company, according to data from startup database Tracxn.
BillDesk, though, refutes all this speculation. Its co-founder Srinivasu says an acquisition is “the last thing on our mind.” Refuting reports that the company is in talks with at least eight investment bankers to pick a suitor, he points to BillDesk’s track record. “Ask anyone who knows us and they will tell you that news of us doing a fashion show for a host of bankers is simply not our style,” he says. In all its previous rounds of capital transactions, the company has never engaged a banker.
BillDesk’s marquee investors over the years represent patient capital and a long-term outlook, says Srinivasu. “Even our early-stage investors (SIDBI Venture Capital, Bank of Baroda, State Bank of India) stayed invested for 10-12 years and exited with extremely handsome returns. Given the company’s market leadership and a well-distributed cap table, it hasn’t been difficult for our investors to find liquidity through secondary transactions, whenever they have needed it,” he said adding that there has never been any exit pressure placed on the company.