Citrus Pay, founded by Jitendra Gupta and Satyen Kothari in 2011 set to acquire by South African media and internet conglomerate Naspers for around $150-180 million, in an all-cash transaction deal.
Japan’s internet major Rakuten was also one of the contender to acquire Citrus Pay. However, the deal fell through.
This acquisition deal is one of the largest deals in the Indian payments market. Earlier Snapdeal buy out Freecharge for $400 million (30% cash, 70% stock). The domestic payments market has been abuzz with mergers and acquisitions in the past year after vast opportunity created by leading players Paytm and Freecharge.
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Payment company Citrus Pay acts as a bridge between bank accounts of merchants and banks and credit card companies.
Naspers, which runs PayU and the Ibibo group in India, is expected to emerge as the leader in the online commerce space in terms of market share. Both Citrus and PayU focus on providing payment solutions to a growing tribe of merchants who operate online, and are largely business-facing in nature.
Venture capital fund Sequoia Capital, an early investor in Citrus, which holds around 30% in the Mumbai-based company, is expected to make a healthy return of over 10-12 times on its investment.
Total Citrus has raised around $32 million for 50% equity from investors like Beenos and EContext, Sequoia and Ascent Capital.
Citrus recently announced that it hit an annualized run rate of processing $3 billion in e-commerce payments in what is estimated as being a $25-billion industry. Typically, payments firms generate around 1-2% of gross revenue from their overall billings. The other large payment gateway companies include BillDesk and CC avenues.
The Citrus-PayU combine will dominate e-commerce payments, although BillDesk would be bigger if utility bill payments were included. A recent report by Google and Boston Consulting Group said that digital payments in India would grow to $500 billion by 2020 with half of all internet users making online transactions. (Source)