South African media and Internet conglomerate Naspers Ltd is set to acquire Mumbai-based online payments company Citrus Payments Solutions Pvt. Ltd in an all-cash deal, at least two media reports said.
The deal size could be between Rs 1,000 crore and Rs 1,200 crore ($150-180 million), according to The Economic Times and sister publication The Times of India.
In a response to VCCircle’s query, Citrus Pay founder Jitendra Gupta said: “(The) news is speculative. Hence, (I) can’t speak anything around it.”
Naspers couldn’t be immediately contacted.
Naspers already runs a similar enterprise-focussed payments solutions startup, PayU, in India. If the acquisition of Citrus Pay goes through, it could strengthen the conglomerate’s foothold in the enterprise side of India’s online payments segment. The consumer side of the business is led by Paytm and MobiKwik.
The Times of India cited people familiar with the development as saying that the acquisition talks have been going on for the past couple of months and that PayU’s global CEO Laurent le Moal and chief financial officer Aakash Moondhra were in India to finalise the deal last week.
PayU operates in India and 16 other emerging economies across Latin America, Europe, Asia and Africa with over 160,000 merchants worldwide on the platform. PayU India was started in 2011 as a unit of Gurgaon-based Ibibo Group, which is controlled by Naspers Group.
According to the media reports, Japanese Internet major Rakuten was also in race to buy Citrus but the discussions fell through.
Citrus was set up in 2011 by Gupta along with Satyen Kothari. It has three business verticals — payment processing, enterprise payment SaaS solutions and consumer payment services. Citrus Pay’s payment gateway is used by companies such as Indigo, Jet Airways, TinyOwl and Amazon India. The company crossed $1 billion run rate in December 2014.
In February last year, Citrus Pay launched consumer-facing app Cube. The app was spun off into a separate entity in December 2015. Kothari left Cirtus to join Cube and manage the startup as founder and CEO.
In October last year, Citrus raised about $25 million in a Series C round from Sequoia Capital, Ascent Capital, eContext Asia and Beenos Asia. It had earlier raised $7.5 million in separate rounds from Sequoia and some Japanese investors.
Sequoia Capital, being an early investor in Citrus and holding nearly 30% in Citrus, is expected to make a healthy return of over 10-12 times on its investment, The Times of India said.
The online payments segment has witnessed a couple of mergers and acquisitions in the past year with Snapdeal’s estimated $400 million takeover of FreeCharge being the biggest deal. In April, Flipkart acquired Bangalore-based mobile payments company PhonePe, its third acquisition in the payments solution space after FX Mart and NGPay.
According to a recent study by Google and the Boston Consulting Group, the size of the digital payments industry in India will be $500 billion by 2020 when it will contribute 15% to India’s gross domestic product.
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