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Prosus agreed to sell PayU’s Global Payments Organisation (GPO) business to Israel’s Rapyd for $610 million in cash, allowing its fintech arm to capitalise on growth opportunities in India.

The deal with Rapyd, a fintech-as-a-service company, excludes Prosus’s biggest payments market in India as well as its units in Turkey and Southeast Asia, the Netherlands-based internet giant said in a statement on Tuesday.

“PayU’s GPO business has grown considerably in recent years, with payment volumes growing more than 300% in the past five years alone,” said Bob van Dijk, CEO of Prosus and Naspers. “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.”

PayU GPO, which provides payment solutions to both enterprise and SMB segments in emerging markets, operates across over 30 countries worldwide.

All eyes on India 

The global investment firm reiterated its strong focus on the Indian payments markets where it operates through its subsidiary PayU India.

“The transaction will enable PayU to focus on the large payments and fintech opportunity in India, where it is the leading payments provider, serving more than 450,000 merchants and more than 2 million credit customers,” the CEO said. 

In FY23, Prosus’s payments and fintech segment grew 32% to $1.1 billion on strong growth in the core payment service provider (PSP) business and India credit business, which increased 47% from the previous year. In FY23, the credit business issued loans worth $742 million.

“We are now fully focused on the huge fintech opportunity in India… 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,” CEO van Dijk said.

Overall, PayU’s India business generated $399 million in revenue, up 31%, from the year-ago period. This was fuelled by growth in enterprise and SMB, as well as diversification into newer segments, including government merchants, omnichannel and other non-MDR (merchant discount rate) products, the company said at the time of releasing its consolidated financial statement for 2023.

Prosus has also faced challenges along the way. It shut down Lazypay Card in response to regulatory changes in India, inflicting a trading loss of $10 million in FY23. 

But PayU CEO Laurent le Moal is optimistic about its lending and digital credit products.

“As we focus our investment on the Indian market, this is an exciting time for Prosus’s Payments & Fintech segment. Overall, India’s digital financial services opportunity continues to be large and under-penetrated, offering healthy growth for the PayU India business,” he said.