We had reported to you about the ongoing talks between PayU and Citrus Pay  for the Naspers owned online payment service provider to buy Citrus Pay. The deal has finally materialised, PayU is buying Citrus Pay for Rs 865 crore, making this one of the biggest deals in the country’s fin-tech space. The entity created from the merger will be competing with Alibaba-backed Paytm, Snapdeal-owned FreeCharge and MobiKwik.

The transaction will be formally announced today and will be an all-cash transaction that will be closed by year end. Experts say that the deal will give prove beneficial to the venture capital investors who have backed the five-year-old company. One of Citrys Pay’s earliest investors Sequoia Capital(32% stake) is expected to earn a four-fold return on its investment of USD 10 million. Ascent Capital(8% stake) will earn about $12 million.

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CitrusPay Founder – Jitendra Gupta (L) and Amrish Rau (R)

Laurent le Moal, chief executive of PayU said in a statement:

“The agreement enables PayU to quickly bring additional innovative financial services to market for its business and consumer customers,…it is a significant milestone for both businesses and the fin-tech industry in India.”

According to le Moal, the merged entity will process a forecasted 150 million transactions in 2016, worth a combined $4.2 billion, and will grow at over 50% annually. It is expected to reach more than 20 million customers and over two lakh merchants. PayU will continue looking out for further buyout opportunities after it completes the consolidation of Citrus Pay with its own operations, a process estimated to last for six months.

Citrus Pay’s managing director Amrish Rau will take charge of the merged entity, and as chief executive of PayU in India, he will report to le Moal. Co-founder Jitendra Gupta is expected to drive the company’s foray into credit through Citrus Pay’s Lazy Pay unit. Shailaz Nag, PayU cofounder, will focus on new areas of growth through new bank alliances.

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Biplab Ghosh

Biplab lives his life around technology and is particularly keen to explore the intersection of technology and human behaviour. Always looking for new ideas, and ways that can make things simpler. He is a geek with the flair for travel and has great passion for music and theatres.

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