Prosus to sell part of PayU for $610 million

Prosus is selling part of its subsidiary PayU to Israel's Rapyd for $610 million, excluding the fintech firm's units in India, Turkey and Indonesia. Prosus CEO said that the company is now fully focused on the huge fintech opportunity in India. Prosus earlier abandoned a planned $4.7-billion acquisition of Indian online payments firm BillDesk by PayU.

The so-called Global Payments Organization of PayU, which forms part of the transaction, has its operation in over 30 countries across Asia, Latin America, Europe and Africa, and contributes to about a third of PayU’s overall revenue.

“PayU’s GPO business has grown considerably in recent years, with payment volumes growing more than 400% in the past five years alone,” Prosus Chief Executive Officer Bob van Dijk said. “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.”

Prosus, through its controlling shareholder Naspers Ltd., made an early bet on China’s Tencent Holdings Ltd., and is seeking ways to unlock value after that holding ballooned in worth. Prosus and Naspers recently received approval from the South African authorities to unwind a complex cross-holding structure between the firms.

Very recently, Rapyd has partnered with another South African firm previously owned by Naspers called Multichoice Group. Rapyd has already acquired a number of companies including the purchase of payments company Valitor in 2021. The deal with Prosus’s PayU will scale its business and market presence in regions including Europe and Latin America, while giving it access to relevant underlying licenses and payment-processing infrastructure.

Prosus is reducing costs and doubling down on efforts to turn profitable by the first half of 2025. The company previously indicated it was working on multiple situations that could include mergers and sales as it seeks to boost shareholder returns.

The latest deal follows a strong performance in Prosus’s payments and fintech segment, with revenue growth of 52% to $903 million in the last financial year.