Can other payment companies provide 8 fold return to investors like Skrill?

MEDICIFounder and Chief Strategy & Innovation Officer

CVC Capital which is a large private equity firm bought a majority stake in Skrill for around $800 Million which is a digital wallet provider operating in UK.  Investcorp is the other large private equity firm which has a minor stake in Skrill. The acquisition is good news to Investcorp as the acquisition brings in an 8-fold return to its initial investment and Investcorp still gets to keep its minor stake in Skrill. By buying a stake in Skrill, CVC Capital has officially entered in to the digital payments space.

Skrill claims to have over 35 Million users spread across 200 countries globally and has tie ups with 150,000 merchants which includes on-line gambling sites. Analysts and the users consider Skrill to be a direct competitor of PayPal. Skrill's business model is similar to Paypal's. A user enters debit or credit card credentials on skrill and each time a transaction is done, the email id of the user is used instead of typing in the card details. Skrill also has added a prepaid card to its services.

During a press release Peter Rutland, Senior Managing Director of CVC stated that "Skrill is a high quality business that has demonstrated its ability to grow rapidly into a market leading provider of online payments serving the online gaming, gambling, digital media and e-commerce industries."

LTP View: Such acquisitions in the digital payments space highlights the boom in alternative payment methods, supported by the proliferation of mobile devices. Acquisitions in the payments space will also encourage more Startups in the payments space heating up the competition. Increase in competition would mean that the larger banks will have to cut down on the time to update their current payment systems and customer interfaces to acquire new customers and retain the existing ones. Overall, this is a good sign for the consumers. 

Amit Goel

MEDICIFounder and Chief Strategy & Innovation Officer

Amit Goel is the Founder & Chief Strategy & Innovation Officer for MEDICI. Amit’s vision is to build a strong FinTech market network that involves financial institutions, banks, startups, investors, analysts & other key stakeholders across the ecosystem – helping each one of them in a meaningful way by removing the asymmetry of information and providing a platform to engage & transact.

Amit is passionate about bringing actionable FinTech-focused insights, innovative products & services for the FinTech ecosystem. Some of his work involves startup scores, bank scores/assessments, predictive viewpoints & other innovations that have helped MEDICI’s customers and the ecosystem. He has been named amongst the Top 100 FinTech thought leaders/influencers in the world & Top 10 in Asia multiple times by reputed agencies, consulting firms as well as financial institutions. Amit has built MEDICI (formerly LTP) as a new-age, tech-enabled advisory/research firm, which is now considered the #1 global research & innovation platform for FinTech in the world.

Amit has been writing pioneering viewpoints on financial technology space that have been ahead of the curve since 2010. His data-driven predictions have helped the customers as well as the ecosystem. His past work experience includes a strong background in strategy & market analysis and advisory to clients (from big business houses to Fortune 500 firms) in payments, commerce, financial services & IT/technology. In the past, Amit had also founded a successful consulting & research practice called GrowthPraxis and has worked at Boston Analytics, Frost & Sullivan, and Daimler Chrysler in strategy & research.