Prosus scraps $4.7B Billdesk acquisition

Amsterdam-based tech investor Prosus is terminating a $4.7 billion deal to acquire Indian digital payments provider BillDesk, which it was planning to combine with its global payments subsidiary PayU.

Why it matters: Macroeconomic conditions and a decline in fintech valuations are causing some companies to rethink their M&A strategies and, in some cases, walk away from deals entirely.

Flashback: The all-cash deal was announced last August and would have been the second-largest M&A purchase of an Indian firm, after Walmart’s $16 billion buyout of Flipkart in 2018.

• The company’s three founders stood to make about $1.4 billion from the deal, with another $3 billion going to major investors.

State of play: But a lot has changed since the deal was announced, as public and private valuations of fintech firms have fallen dramatically.

• Prosus shares have declined about 27% this year.

The intrigue: Prosus would say only that "certain conditions" weren't met by its Sept. 30 deadline, even though the deal recently obtained regulatory approval from the Competition Commission of India.

• Regulatory clearance from the Reserve Bank of India was also needed, Bloomberg reports.

Of note: According to Pitchbook, BillDesk had raised about $93 million from investors like Visa, Temasek, General Atlantic and March Capital.

• It had a $1.5 billion post-money valuation at the time of its last funding round, in 2019.