Payments company BillDesk's acquisition by Prosus-backed PayU for $4.7 billion is not only one of the biggest deals in the Indian digital ecosystem but has also meant massive wealth creation for investors and founders who have exited completely.
Early investors have seen returns of over 45 percent CAGR (Compound Annual Growth Rate) over 20 years, BillDesk co-founder MN Srinivasu told CNBC-TV18 while speaking about the decision to sell the company instead of going for an IPO, and what the combined entity will look like.
For the founders as well, who owned about a 10 percent stake each in BillDesk as per Tracxn, the deal has brought windfalls of close to $500 million each as they exit fully.
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Here are a few excerpts from the conversation with BillDesk co-founder MN Srinivasu:
ON SELLING BILLDESK
How does it feel right now, selling the company you have built for two decades? What have the last few days been like?
The deal is a validation of what we have created in India. It is a proud moment for BillDesk employees and a big moment for fintech in India.
ON SELLING BILLDESK vs IPO
What led to this decision. What made you choose between an IPO and this? An IPO could have probably given you a better valuation.
We evaluated what will be good overall for the Indian fintech ecosystem. We evaluated an IPO. The choice was between an IPO and a transaction like this. We wanted to provide liquidity to investors. The option of Prosus came up as we were evaluating the IPO. Prosus is a great fit, it is a financial investor and has a strategic interest in payments.
WAS BILLDESK ON THE BLOCK?
You went with Prosus because they are a strategic player in this space. There were reports that Billdesk was on the block for some time and that you were talking to other players as well. What were the discussions with Prosus and when did it begin?
We were not talking to anyone for a sale, it was all media speculation. Prosus was the only party we engaged with. We started exploring the next step for BillDesk at the beginning of 2021. Prosus reached out in March-April 2021, the senior management engaged in the discussions with us and closed the deal in a few months.
CO-FOUNDERS' ROLE GOING FORWARD
Will you and your co-founders stay on? Usually, when the founders exit a company, they move on. What is the agreement here?
We will continue to stay on to scale BillDesk and PayU platforms. We are looking to leverage both platforms for scale. There were options to only partially exit, but we wanted to go with the most efficient way forward, which was to sell 100 percent of BillDesk to Prosus.
ON WEALTH CREATION
You are among the few companies where the founders still held a significant stake. You have now got close to $500 million each from this deal. Your investors will be very happy. What are the kind of returns for your investors? Some have stayed for over a decade.
Some early investors including angel investors and venture investors such as Clearstone would have got returns of over 45 percent CAGR over 20 years as per our estimates. We hope our investors are happy with the returns.
(Edited by : Jomy Jos Pullokaran)
First Published: Sept 3, 2021 4:19 PM IST
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