News: PayU buys Citrus Pay for Rs 865 crore

Entrepreneurship

PayU buys Citrus Pay for Rs 865 crore

Naspers-owned PayU buys Mumbai based Citrus Pay with focus on big return on investments.
PayU buys Citrus Pay for Rs 865 crore

Naspers-backed PayU, an online payment service provider has acquired FinTech company, Citrus Pay for Rs 865 crore in an all cash transaction as reported by ET. 

Based in Mumbai, Citrus Pay was founded in 2011 by Jitendra Gupta, former ICICI bank senior executive and Satyen Kothari who acts as a bridge between bank accounts of merchants and banks and credit card companies. The deal will strengthen Naspers' payments division and is expected to support its strategy to grow its financial services footprint across emerging markets, said PayU global CEO Laurent le Moal. The main focus of Citrus Pay and PayU will be on providing online payment solutions to a huge group of merchants competing with the big companies like Paytm backed by Alibaba and others like Snapdeal-owned Freecharge. 

Citrus Pay has multiple investors in its list. Sequoia Capital, its earliest backer, had invested around $10 million owning a 32% stake in the venture with a whopping four-fold return on its investment. Another big investment player is Ascent Capital, which bought 8% stake last year earning about $12 million. Other investors of Citrus Pay include Japan’s Beenos and eContext Asia. 

PayU-Citrus collectively will process 150 million transactions in 2016 worth a combined $4.2 billion, and will grow at 50% annually, Moal said. 

Amrish Rau, currently Citrus Pay managing director, will become CEO of PayU in India after the takeover; he will report to le Moal. Co-founder of Citrus, Jitendra Gupta will drive PayU's fin tech foray into lending through its platform Lazypay, while PayU co-founder Shailaz Nag will focus on new areas of growth through bank alliances. 

Besides e-commerce, there is a huge potential to be tapped in the bill payment platform, which was opened up by Reserve Bank of India by bringing all billers on one common platform. Citrus Pay recently claimed of hitting an annualised run rate of processing $3 billion in e-commerce payments which is now estimated as being a $25-billion industry. The other payment gateways include BillDesk and CC avenues. 

A recent Google and Boston Consulting Group report estimated digital transactions will rise to $500 billion by 2020 with half of all internet users making online transactions.

 

Read full story

Topics: Entrepreneurship, #MergersAndAcquisitions

Did you find this story helpful?

Author

QUICK POLL

How do you envision AI transforming your work?