Amidst facing heat from NPCI and BBS, BillDesk eyes raising $100 Mn

Payments gateway BillDesk is looking to raise $80-$100 million through a secondary sale of its shares.

The firm has held talks payment giants like PayPal and American Express in search of potential buyer as its PE investors seek the exit. Last year in October, BillDesk had also explored a sale talk with Naspers-backed PayU. However, they did not reach consensus over the valuation.

BillDesk provides payment solutions for customers in e-commerce, financial services, retail and other sectors.

Founded in 2000 by M.N. Srinivasu, Karthik Ganapathy, and Ajay Kaushal, three former consultants at Arthur Andersen, the accountancy firm that went under, BillDesk is one of the few profitable internet firms in India.

The company processes payments worth almost $40 billion per year. In FY17, the company claimed to have revenue of Rs 950 crore, according to data and research platform Paper.vc.

Presently, BillDesk is valued at over $1 billion. It raised capital from private equity firms including TA Associates, General Atlantic, Clearstone Venture and Singapore’s state-held firm Temasek Holdings.

In last three years, the digital payments business, both business-to-business (B2B) and business-to-consumer (B2C), has witnessed noticeable growth. The payment segment also saw significant development. In September 2017, PayU bought Citrus Pay for $120 million. Pine Labs also raised $82 million earlier this month from Actis Capital and Altimeter Capital in a round that valued the company at close to $1 billion.

Besides, the payment gateway firm is facing heat to change its business model with the arrival of the National Payments Corporation of India (NPCI) and its Bharat BillPay System. Now the aggregators such as BillDesk will have to be part of Bill Pay and obtain a license from the Reserve Bank of India.

It is now mandatory for billers across the categories – mobile, DTH, power, gas and water – to come on board. And aggregators have to do away with all its individual agreements with billers.

This will have a significant impact on BillDesk earning. Earlier, BillDesk earned around Rs 5 for every bill processed. With Bill pay system, the biller ends up paying an average of about Rs 2.5 per bill.

Among its competitors include PayU, CCAvenue, Razorpay and Pine Labs.

Meanwhile, the launch of Unified Payments Interface (UPI), in August 2016 has also intensified the payment space in the country. It has prompted many global behemoths including Google, Facebook and WhatsApp to introduce their own payment apps.

The development was reported by The Ken.