Fintech giant PayU is selling its Global Payments Organisation (GPO) business for $610 million in an all-cash deal to Rapyd, the fintech-as-a-service startup. According to Dutch investor Prosus, the deal will enable its fintech arm to focus on the large payments and fintech opportunity in India, where it is serving more than 450,000 merchants and over 2 million credit customers.
“We are now fully focused on the huge fintech opportunity in India, where PayU is the leading payments service provider and is rapidly expanding its credit offering,” said Bob van Dijk, CEO, Prosus. "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," he added.
In FY23, PayU India reported $400 million in revenue for the financial year ended in March 2023, a growth of 31 percent. PayU India facilitated more than 1.2 billion transactions with a Gross Transaction Value (GTV) worth $39 billion at a growth rate of 30 percent year-on-year.
"PayU’s payments business is one of the largest, fastest growing and most profitable businesses in India among non-banking players, delivering 42 per cent year on year growth in the last year alone," said Laurent le Moal, PayU CEO.
As per Prosus' statement, the business contributes around 30 per cent of PayU's overall revenues. In FY23, total payment volumes for GPO grew 12 per cent year-on-year to $34 billion, which is around a 3x growth in 5 years.
The investment firm further claimed that PayU’s GPO business has grown considerably in recent years, with payment volumes growing more than 300 percent in the past five years alone. PayU’s GPO business provides e-commerce payment solutions for global merchants in over 30 countries across Latin America, Central and Eastern Europe and Africa.
"The business occupies a strong position in the global fintech space as a result of the investments made in building an exceptional local payments business, with global scale," said Dijk.
The acquiring firm Rapyd provides APIs to enable payments, card issuing, digital wallet and other financial services to companies like Uber and Ikea and said it is taking a significant step forward in its growth with a big acquisition. Rapyd is currently valued at $8.75 billion and has raised more than $806 million, with its current investors including the likes of Fidelity, Dragoneer, General Catalyst and Target Global, as well fintech giant Stripe.
The transaction is subject to customary regulatory approvals and closing conditions. "This transaction will help Rapyd to significantly scale and market its presence in Central and Eastern Europe and Latin America, while also gaining access to relevant underlying licenses and payment processing infrastructure," the statement said.
