Netherlands-based private equity player Prosus, which is a backer of multiple Indian startups including Byju's, DeHaat, Fashinza, The Good Glamm Group, Meesho, among others, has sold a part of PayU’s business for $610 million (nearly Rs 5,000 crore) in an all-cash transaction.
The PE player has sold PayU’s Global Payment Organisation (GPO), its global payments business unit, to London-headquartered fintech platform Rapyd.
With this deal, PayU is keeping its businesses in India, Turkey and Southeast Asia. The company has operations in around 50 countries. The deal will help Rapyd to expand its business in Latin America and certain parts of Europe.
Prosus said that the transaction will contribute to its e-commerce portfolio and focus investments on the markets with the highest growth potential. It added that PayU will now focus on its rapidly growing Indian payments and credit business.
PayU claims that it has more than 450,000 merchants in India, and it serves more than 2 million credit customers. The company also owns and operates the buy-now-pay-later platform LazyPay.
“We are now focused on the huge fintech opportunity in India, where PayU is the leading payments service provider and is expanding its credit offering. As one of the fastest-growing major economies in the world, we strongly believe in digital India and are excited about the next phase of growth for PayU in India,” said Bob van Dijk, chief executive officer, Prosus.
PayU India generated a revenue of $399 million (Rs 3,271 crore) for FY23, up 31% y-o-y, driven by growth in enterprise and SME businesses, as well as diversification into newer segments.
It is important to note that the Indian entity’s contribution to Prosus’ core payment service provider (PSP) business climbed to 51% in FY23 from 47% contribution in the fiscal before, with its total payments volume rising about 33% to $58 billion.
“PayU’s payments business is one of the largest, fastest growing and most profitable businesses in India among non-banking players, delivering 42% year-on-year growth in the last year alone. Overall, India's digital financial services opportunity continues to be large and under-penetrated, offering healthy growth for the PayU India business,” said PayU’s CEO Laurent le Moal.
The transaction is subject to regulatory approvals and closing conditions. Rapyd is currently in discussions with its investors to raise $700 million, Techcrunch reported. The company, valued at $8.7 billion, counts Stripe, Fidelity, Dragoneer, General Catalyst and Target Global as its investors.
