Why this Jodhpur-born entrepreneur sold ItzCash for Rs 800 cr last month

Mumbai-based digital payments company ItzCash, recently sold its 80 percent stake to US- based software firm Ebix, making it one of the largest acquisitions in digital payments space in last 12 months.

Jodhpur-born ItzCash managing director Naveen Surya (on right-inset above) began planning for a long haul for the company when early ItzCash investors began looking for an exit. Started in 2006, ItzCash has raised USD 5 million from investors such as Intel Capital, Lightspeed and Matrix Partners India.

“Ebix has a presence in 40-50 countries. We realised that we can use this footprint and expand our learning and research and gradually export this model of financial exchange in other relevant countries,” Surya told Moneycontrol on the sidelines of the IAMAI FintechX conference in Delhi.

"The conversation started with finding a partner for our next 10-year journey," said Surya, a company secretary by qualification. Surya added that Ebix CEO Robin Raina understood ItzCash’s “convergence theme really well.”

Nasdaq-listed Ebix provides on-demand software and e-commerce services to the insurance, financial, e-governance and healthcare industries, conducts over USD 100 billion in insurance premiums annually on its platforms.

 Watch an interview with ItzCash MD: 

It has presence in Australia, Brazil, Canada, India, New Zealand, Singapore, the US and the UK.

ItzCash has moved on from being a prepaid card and wallet company to providing remittances, financial services and corporate products.

In May, Ebix acquired a 80 percent stake worth Rs 800 crore in ItzCash as part of a joint venture with the Essel Group. Under the terms of the agreement, ItzCash was valued at a total enterprise value of approximately USD 150 million.

With the transaction, Ebix got an entry into India’s prepaid wallets, cards and bill payments space, which is dominated by players such as Paytm, Oxigen and others.

Surya said Ebix’s Raina proposed leveraging their expertise in respective areas and geographies. While Ebix would look to create a “financial exchange model” in India to deliver not just payments to a customer, but “every financial service that he wants in his life,” ItzCash will look to provide payments for Ebix’s clients.

On Future of Digital Payments in India

Surya said physical and digital transactions working seamlessly will become a reality, in the near future, but there is still a lot of ground to cover. He added that while banking has penetrated 50 percent of the market, investments and credits are two areas which are yet to penetrate 80-90 percent of the Indian market.

Responding to a question about the oft-repeated belief that banks will soon become redundant because of the rapidly expanding digital payments infrastructure, Surya said that it was becoming increasingly difficult to predict the success and failure of new ideas.

“It’s very difficult to predict if banking in a physical infrastructure will go away, will the role change, will the payments bank overtake the mainstream bank. I believe given the nature of the market size, given the penetration levels that we have, for the next 20 years there’s going to be enough room for every type of a model in this country to co-exist," he said.

On regulations in the Fintech space

Surya said that having multiple agencies and ministries look at regulating the Fintech space was “both good and bad”.

“We believe that the government and the regulator’s job is to give us a highway for Fintech companies to run their vehicles, but from the perspective of keeping us safe and secure, they put speed breakers. Our job is to work with them to make sure they put the speed breakers at the right place. At a wrong place, it can actually cause an accident," he said.

joseph.sebastian@nw18.com