INTRODUCTION

Citrus Pay: -

Citrus Pay is leading the revolution towards mobile and digital payments across all spheres of a
consumer’s life. Being led by Amrish Rau and Jitendra Gupta, it is India’s fastest growing
fintech company that provides consumer payments and mobile banking services. Citrus Pay
partners with the top airlines, utilities, marketplaces, and 10000 other merchants to enable
seamless, secure payments for 25 million consumers. We are known for introducing industry-
first payment solutions such as 1-click checkout, wallet for cabs, consumer analytics, native
mobile app payments etc. Few of the credible merchants associated with Citrus are Pune
Municipal Corporation, Delhi Metro, Delhi Jal Board, PVR, INOX, BookMyShow, Shop Clues,
Jet Airways, Indigo, GoAir, Runnr, Faasos, Grofers, ZoomCar, Airtel, etc. We bring to the table
the complete stack of payment architecture and much more.

A few key things being:

1) A super charged SaaS platform built to handle the unique needs of emerging markets.

2) India’s best smartphone-centric payment solutions.

3) India ’s most popular online consumer wallet.

4) Comprehensive payment processing for all popular Indian payment modes Constant
innovation is the norm at Citrus Pay as it streamlines checkout flows, promises absolute security
for consumers, guarantees great payment services to thousands of merchants, handles millions of
transactions per month, and optimizes online purchases for the modern smartphone and tablet
wielding Indian consumer.

payU:-

PayU is a leading financial services provider in global growth markets.

We deliver innovative technology that enables billions of people and millions of merchants to
buy and sell online.

Our local operations span 17 markets across Asia, Central and Eastern Europe, Latin America,
the Middle East and Africa.

As a leading online payment service provider, we deploy more than 300 payment methods and
PCI certified platforms to process approximately 1.2 million payments every single day. We also
specialise in innovative consumer and small business products that improve access to credit and
banking services in markets that are underserved by traditional financial services providers.

With a heritage in payments, PayU has a strong track record creating fast, simple and efficient
financial services technology that meet the unique needs of the merchants and consumers in our
local markets.

We believe in collaboration and partnerships. That’s why we have become one of the leading
fintech investors globally, combining the expertise of high growth companies with our own
unique local knowledge and technology to ensure that our customers have access to the best
financial services.

PayU is the fintech and e-payments division of Naspers, a global internet and entertainment
group and one of the largest technology investors in the world. Operating in more than 120
countries and markets with long-term growth potential, Naspers builds leading companies that
empower people and enrich communities. Naspers is listed on the Johannesburg Stock Exchange
(NPN.SJ) and has an ADR listing on the London Stock Exchange (LSE: NPSN).

STRATEGIC DIMENSION:-

PAYU- INNOVATION (BY trying to acquire external firm with new tech and innovation.)

Citrus- INNOVATION (leading the revolution towards mobile and digital payments across all
spheres of a consumer’s life.)
DETAILS of DEALS of BOTH the COMPANIES: -

Hundreds of millions of dollars of investment have been put into commerce startups in the fast-
growing market of India, from marketplaces like Flipkart and Snap deal through to payment
startups like PayTM. Now one of the more interesting of these has been acquired. payU, an
online payments company with a focus on developing markets that is owned by south Africa’s
naspers has acquired India’s Citrus Pay for $130 million in cash, in what the companies say is
the largest cash exit for a payments company in India to date.

The deal, which will close in Q3, will create a larger footprint for PayU in India with over 30
million customers and projected to process 150 million transactions in 2016 worth $4.2 billion.
Today, both companies offer digital wallet services — essentially a way of topping up and
spending money online and on mobile for people who may not have payment cards — and
payment services for online and in-store merchants. The combined company will use this to
compete better with others like PayTM, which is the largest payments and mobile wallet
provider in the country.

Notably, PayTM is in the process of raising $300 million at a $4.8 billion valuation. So far it has
locked down $60 million and sources at the company tell us it expects the remainder of that to
close in coming weeks.

It’s a much smaller sum but still a good exit for Citrus Pay, which had raised around $32
million from investors that include Sequoia, Ascent Capital and eContext.

PayU itself got its start in India but is now active across 16 markets as Naspers — which both
makes strategic startup investments (including in India) and acquisitions to augment its own
media and digital business — used its acquisition of PayU in 2014 to consolidate its payments
businesses across several other markets.

Citrus Pay and PayU today cover a lot of the same kinds of services, but it looks like the
combined operation will be a lever to expand into more offering around banking and other
services. Like PayTM and rival services from e-commerce giants like FlipKart and Snapdeal as
well as other big global players like PayPal, all of these companies are tapping into the fact that
there is low credit card and bank account penetration in the country, and yet the appetite to buy
things online and in person is growing, thanks to an expanding middle class and the growth of
smartphone penetration to make transactions.

Boston Consulting Group estimates that digital transactions will hit $500 billion by 2020,
representing tenfold growth in the next four years.

As part of the deal, Amrish Rau, Citrus Pay MD, becomes CEO of PayU in India reporting to
PayU Global CEO, Laurent le Moal. PayU cofounder Shailaz Nag will focus on new services
and bank partnerships; Citrus Pay founder Jitendra Gupta will head up the merged company’s
credit business (currently called LazyPay at Citrus). Meanwhile the other PayU cofounder Nitin
Gupta, will help with the transition before leaving PayU.

“Today’s announcement is a significant milestone for both businesses, as well as the fintech
industry in India,” said Laurent le Moal, CEO of PayU. “It is exciting for everyone across the
PayU and Citrus teams as we bring together new capabilities that will help us to better serve our
collective clients.”

OBJECTIVE

Since India is the most exciting place for the payments ecosystem and there is no doubt about
that. What India needs now is the scale and efficiency for further growth and that is where our
Citrus acquisition made sense and the real value of the industry is in on boarding the merchants
and the data that is being generated. These two things are essential for financial services. Beyond
payments there is an even bigger opportunity in India which is access to financial services,
especially credit.

Read more at:

//economictimes.indiatimes.com/articleshow/61524160.cms?
utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
POST MERGER

Over the last one year they have doubled thier processing volumes, having reached around $1.1
billion of payments through our platform. Also, seeing that in the next two years the business
will be $250 million and bigger in terms of revenue. We are not only building scale but also on
track to make the India business profitable in the next month or two.

Strategic dimension: -

payU and Citrus – Market differentiation and innovation too.

SUCEESSFUL

Naspers has said that its payments business PayU recorded over 400 million transactions during
the financial year ending 31st March 2017, processing a total payment volume (TPV) of over
$16 billion, up 36% year on year. Six of the 17 markets where PayU is operational reported
“operational growth of over 50%”, Naspers said in its annual report.

PayU claims over 300,000 merchants globally. The company hasn’t released India specific data
in the report.

Average daily transactions for the company grew to 1.6 million from 0.9 million, up 72%
overall, due to the addition of Citrus Pay to the business in September 2016. Without Citrus Pay,
average daily transactions for the company would have grown by 49%: we calculated, and that’s
around 1.341 million per day, without Citrus Pay. Thus, it seems that the Citrus Pay acquisition
added around 0.259 million transactions per day to the business, though the numbers from Citrus
being taken into account are only from November 2016 to March 2017.

PayU had bought 100% stake in Citrus Pay last year for a total of $112 million, with an
additional $18 million as “employment-linked prepayment”. The purchase price allocation,
according to Naspers: “net debt $1 million; net working capital $2 million; intangible assets $ 15
million; deferred tax liability $5 million and the balance of $105 million to goodwill. The main
classes of intangible assets recognized in the business combination were trademarks, customer
bases and technology.”

With Citrus, PayU recorded a revenue of $186 million for the year, up 33% for the year, from
$140 million. Citrus Pay doesn’t appear to have had a significant impact on the company’s
revenues, since without Citrus Pay, the growth would have been 32%. Again, note that the
numbers from Citrus being taken into account are from November 2016 to March 2017.

Naspers says that the acquisition of Citrus Pay in India “consolidated PayU’s position and will
allow it to build a franchise in e-commerce while growing vertical market positions in the airline
and telecommunications industries.” It says that the investment increased customer base to over
30 million customers, and over 300,000 merchants.