On Jan 1st of 2000, there were three consultants from Arthur Andersen LLP who set out to build a digital payments company when the latest century was at the threshold of its beginning. At that time, M.N. Srinivasu, Ajay Kaushal, and Karthik Ganapathy found their first institutional backer which was an Indian state-run lender.
Their story runs counter to the story of any start-up of the country and is separate from every startup that runs on funding round that is touted in press statements and staff parties. Now when their start-up BillDesk has been brought by Proses NV for $4.7 billion, the founding trio ha each netter half-a-billion dollars for their combined 31% stake.
According to sources, Proses-owned PayU took complete charge of this acquisition as BillDesk had never employed a PR firm. This is completely contradictory to what the situation of the many start-ups of the country is today.
“We aren’t the typical young startup founders and while Kaushal and I are 53 years old, Ganapathy is “only pushing 50. When we started on Jan. 1, 2000, we didn’t have a startup idea. We thought it would be a great opportunity to build something at the intersection of tech and financial services, it was just gut-feel.”
However, even if the trio has now sold the stakes of the entire of BillDesk they will continue to be part of the business. This latest Prosus deal is set to intensify competition in India’s teeming fintech sector, where analysts and the trio believe has enormous opportunity for scale as “anyone can move $100 million or $0.05 within seconds at virtually no cost.”
This is the first time that India-based start-up founders have gathered such profits after the selling of the company. What’s more interesting is how the company came into existence.
All the three founders met while working in the financial services practice at Arthur Andersen and quit in 1999. it’s interesting to note that after they quit, some mere years later the accounting giant combusted in the wake of the Enron Corp. scandal in 2002.
During the earlier days, BillDesk found its backer in the form of the Bank of Baroda and a fund run by financier Small Industries Development Bank of India. Both of which were government-owned and the antithesis of today’s high-profile, global venture capital companies. Then after a decade-and-a-half, later big-name investors such as Temasek Holdings Pte, Visa Inc., and General Atlantic LLC would come aboard as the start-up’s investors.
In ten years, the start-up managed to build a global roster of clients and was offering its gateway to millions of customers making India payments on Amazon.com Inc. or Microsoft Corp.’s LinkedIn service, buying Netflix Inc. subscriptions, or transacting on Apple Inc.’s local online store.
This year, the company began exploring an IPO and had also appointed investment bankers. However, at the right moment, Proses arrived in the story weeks ago and offered a 100% buyout to the founders of BillDesk.
The investment was clear, and the company had built its user base when the country had about 50,000 internet users. However, the market now contains more than 800 million Indians who are using the internet, and e-commerce is expected to swell at a time when China is cracking down on its tech own industries.
“We were the payments solution that stayed in the background, allowing banks to brand and operate our solution. We steered clear of the grow-big-at-any-cost fintech model.”