South African internet major Naspers is set to acquire the online payment gateway solutions provider Citrus Pay for around $150-180 million in an all-cash deal.
The deal, which is expected to close by the end of August or September this year, will provide an exit to the fintech company's current investors, which include Sequoia Capital, Ascent Capital among others, reported The Economic Times.
In an instance of inbound acquisition, Citrus Pay will be absorbed by Pay U, the Gurugram-based payment gateway solutions owned by the South African company. Naspers could inject around $30-40 million into Citrus Pay after the acquisition.
"It is our company's policy to neither acknowledge nor deny our involvement in any merger, acquisition or divestiture activity, nor to comment on market rumours," Aakash Moondhra, CEO, Pay U told ET, while Citrus Pay managing director Jitendra Gupta called the news "market speculation."
The MD and the company's workforce of around 300 people are expected to be part of the new entity.
Citrus Pay had won its largest investment of $25 million in a Series C funding round from Ascent Capital and Sequoia Capital in October 2015. In the same month, the company had also acquired the full-stack payment platform, Zwitch Payments, for an undisclosed amount. The fintech firm had raised $32.5 million in funding since 2011, when it was founded.
Fintech start-up space, especially the payment gateway segment, has seen several mergers and acquisitions within the country over the past year. The digital payment industry is projected to be around $500 billion over the next five years and will account for 15 percent of India's GDP, read an earlier report by Google and Boston Consulting Group.
The largest acquisition in fintech remains Snapdeal's acquisition of FreeCharge for $400 million in April, 2015. Flipkart acquired UPI payments start-up, PhonePe in a deal estimated between $10-20 million in April this year. The eCommerce major earlier took over FXMart and NGPay, two other payment services start-ups.