Three IIM graduates make ₹ 3,500 crore each sales payment startup - Start Up Gazzete
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Three IIM graduates make ₹ 3,500 crore each sales payment startup


When three Arthur Andersen LLP consultants set out to build a digital payments company at the turn of the millennium, the first institutional sponsor they found was an Indian state lender. This week, Prosus NV bought BillDesk for $ 4.7 billion, earning the trio of half a billion dollars each for their combined 31% stake.

The story of M.N. Srinivasu, Ajay Kaushal and Karthik Ganapathy goes against the rules of the Indian startup textbook. In an age where every round of funding is touted in press releases and staff parties, Prosus-owned PayU found it had to take full charge of the takeover announcement because BillDesk had never employed a company from public relations.

“We’re not your typical young startup founders,” Srinivasu said by phone, hastening to add that while he and Kaushal are 53, Ganapathy “is only pushing 50.” “When we started on January 1, 2000, we didn’t have a starting idea. We thought it would be a great opportunity to build something at the intersection of technology and financial services, it was just an intuition.”

While the trio have sold all of their stakes, they will continue to be part of the business, Srinivasu said, without elaborating. The Prosus deal could intensify competition in India’s crowded fintech sector, where it sees a huge opportunity for scale, as “anyone can move $ 100 million or $ 0.05 in seconds at virtually no cost.”

The founders met while working in the financial services practice at Arthur Andersen and resigned in 1999, just a few years before the accounting giant was burned in the wake of the Enron Corp. scandal in 2002. All graduates of the leading Indian Institute Administration of India, left the so-called successful careers to become entrepreneurs without significant savings.


BillDesk’s first backer was the Bank of Baroda and a fund run by the financier Small Industries Development Bank of India, both government-owned and the antithesis of today’s high-profile global venture capital companies. It would be more than a decade and a half before big investors like Temasek Holdings Pte, Visa Inc. and General Atlantic LLC come on board. By then, BillDesk had built a global customer list and was offering its gateway to millions of customers making payments in India on Inc. or Microsoft Corp.’s LinkedIn service, buying subscriptions from Netflix Inc. or transacting at Apple Inc.’s local online store BillDesk began exploring an IPO this year and had appointed investment bankers. Then Prosus arrived on the scene weeks ago and offered a 100% purchase.

The appeal was clear: More than 800 million Indians are using the internet, and e-commerce is expected to rise at a time when China is cracking down on its tech industry.

BillDesk started when India’s internet user base was roughly 50,000. At one extreme, the company’s technology pipeline collected billing data from utilities such as power and water providers and phone companies. On the other hand, it compiled paper mandates from bank clients to debit payments to these utilities from their accounts. It turned out to be a robust system. Customers no longer needed to queue to pay bills. Utility players didn’t have to spend millions of man hours reconciling bank transactions. And banks didn’t have to deal with physical payments where customers clogged their branches. The explosive growth of digital payments on the back of ubiquitous smartphone internet access gave BillDesk a boost. It now facilitates all kinds of payments, from insurance to property taxes, and recurring payments like mutual fund investments, credit card payments, and school fees.

BillDesk, which charged the utility company a commission and shared a percentage with banks, has been profitable since 2007. It made $ 253 million in gross income in fiscal 2021, while earnings before interest, taxes, depreciation and amortization were $ 42 million, according to a Prosus regulatory filing as part of the acquisition.

Srinivasu said the founders have not made plans to use their windfall profits.

“We were the payments solution that stayed in the background, allowing banks to dial in and operate our solution,” Srinivasu said. “We stayed away from the fintech model of growing at any cost.”

Author avatar
Joshua Smith

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