Payment gateway company PayU India is going independent of the Ibibo Group (MIH India), and as a part of a changed reporting structure, and PayU CEO Nitin Gupta will now report to the company’s South African parent Naspers, instead of Ibibo, MediaNama had heard from multiple sources in the company. Confirming this development to MediaNama, Gupta said that “I can confirm that my reporting structure has changed”, also pointing out that as a business, they’ve always operated at an arms-length from Ibibo. “We’ve always treated the Ibibo group as a merchant, and that relationship was always that of a value provider and merchant. That view hasn’t changed,” he said.
Readers should note that before prior to being renamed, PayU India Pvt Ltd was called Ibibo Web Pvt Ltd: As of October last year (see this, from a filing), Naspers owned 100% in Intervision Services Co, which owned 80.1% in MIH India eCommerce, which owned 100% in MIH India Mauritius, which owned 100% in PayU India Pvt Ltd (previously Ibibo Web). We’re not sure if the company structure has changed, or will change.
Gupta declined to comment on plans for the company: the payment gateway segment in India has seen a rise in competition over the past year, which has led to price competition and product innovation in the segment. This change was, as far as we know, precipitated by PayU, and of late, e-commerce ventures like Flipkart and Snapdeal have also launched their own payment gateways. So what will PayU do in India from here on? “There are certain changes and plans, which will be announced by Naspers later,” Gupta said.
This switch in reporting structure has been followed by a re-branding for PayU’s payment gateway business in India a couple of days ago: from the Indian sounding name of PayUPaisa (paisa means money in Hindi), the company is now called PayUMoney. PayU is currently only present in the Czech Republic, Hungary, Latin America, Poland, Romania, Russia, South Africa, Turkey and Ukraine, apart from India, and this leaves a South East Asian market open for expansion. In a press release announcing the name change, Gupta is quoted as saying that the company’s vision is to make PayU a global brand, though the company hasn’t commented on expansion plans.
Ibibo: The Incubator For Naspers In India?
This is the second Naspers backed company to separate from Ibibo / MIH India in recent times: Naspers had launched TenCent’s business in India as well, by launching WeChat in the country. In October last year, TenCent decided to go solo, and took with it WeChat and Ibibo Games, as a part of an arrangement with Naspers. That shift allowed TenCent to directly control its operations in India, and its destiny.
Post that switch, Ibibo/MIH India managed Goibibo, redBus, PayU India, Tradus and Gaadi, and now you can remove PayU from this list. Among the remaining businesses, GoIbibo is another business that Ibibo set up, that appears to have scaled, entering a largely stagnating market of travel ticketing, and using heavy marketing and discounting to attract customers. Redbus is a company that Naspers acquired 80% in for around $101 million, a deal that was led by MIH India CEO Ashish Kashyap. We wonder if we’ll see both GoIbibo and Redbus also develop global aspirations, like PayU, and separate from Ibibo/MIH India.
Naspers had also invested $140 million in Flipkart in India.