Commerce startups are the fast-growing market of India. Hundreds of millions of dollars of investment have been put into these commercial startups. From marketplaces like Flipkart and Snapdeal where a user can buy daily needs products to payment startups like PayTM through which a user can recharge his phone or satellite television. Now one of the most interesting startup has been acquired. PayU, an online payments company has acquired India’s Citrus Pay for $130 million in cash. This bought out is one of the biggest deals in the Indian financial technology space. PayU purchased this Mumbai startup company for about Rs 860 crore.
This acquisition move will help the global payments company PayU to add more than 30 million to its user base. As a part of the strategy it will also take the firm closer to its expected 150 million transactions processing in 2016, which will be worth $4.2 billion.
Citrus Pay, Started in 2011, have signed up with more than 10,000 merchants, it managed to crossed over 10 million transactions per month across its merchant and consumer businesses, and worth a gross business Value of $2.2 billion. This payment gateway operates in the streams of airline bookings, marketplaces, offline to online payments, and micro transactions.
Around 5% (43 crore) of the total transaction value is part of the ESOP pool. About 15 employees of the company are set to collect over Rs 1 crore each, with an office boy who was one of the first employees at the company is taking home over Rs 50 lakh.
Speaking on the acquisition, Laurent le Moal, CEO of PayU, said:
Today’s announcement is a significant milestone for both businesses, as well as the fintech industry in India. I’m delighted that Amrish Rau, Shailaz Nag and Jitendra Gupta will lead PayU in India and unite our future strategy. We are excited about the opportunity to capitalise on our shared heritage in payments and build a broader financial services proposition, something PayU is focused on across all of the 16 countries we operate in.
Founders Amrish Rau and Jitendra Gupta will take up new roles in the merger. Citrus Pay Managing Director Amrish will become CEO of PayU India. This alliance of PayU and Citrus Pay will be directly competing with PayTM, Snapdeal-owned Freecharge and MobiKwik.