One of the biggest M&A deals in the fintech space has fallen through with the South African tech major Naspers’ investment arm Prosus calling off the deal to acquire Mumbai-based payments firm BillDesk.

Last year it was announced that an agreement had been reached between PayU Payments Private Ltd, a subsidiary of Prosus NV, and shareholders of the Indian digital payments provider BillDesk, to acquire BillDesk for $4.7 billion. The deal would have created India’s largest payment firm.

The closing of the transaction was subject to the fulfillment of various conditions precedent, including approval by the Competition Commission of India (CCI). PayU secured CCI approval on September 5. However, certain conditions precedent were not fulfilled by the September 30, 2022, long stop date, and the agreement has terminated automatically in accordance with its terms and, accordingly, the proposed transaction will not be implemented, Naspers said in a statement without explaining what conditions were not fulfilled by the Indian firm.

According to Sanchit Vir Gogia, Chief Analyst and CEO, Greyhound Research, “There must have been an exceptional conflict between Nasper and BillDesk — resulting in the calling off of the deal at such a late stage. It does not represent the overall state Indian fintech start-up ecosystem, which continues to be very competitive and innovative. Therefore, the calling off of this deal is not an indication of sealing of startup funding sentiments and it will not impact the valuation of other fintech players. However, BillDesk will certainly have issues around valuation and subsequent fundraising.”

BillDesk did not offer any comments on the development. Another industry expert said the deal may have been called off due to differences in valuation as technology firms and stocks worldwide have experienced significant sell-off and devaluations, amid inflation and concerns of a global recession. This comes even as start-up funding has been declining over the last six months.

Naspers said it remains committed to the Indian market and growing its existing businesses within the region, Naspers through its subsidiary Prosus, has been a long-term investor and operator in India — investing close to $6 billion in Indian technology companies since 2005.