Rapyd, the fintech-as-a-service startup that powers payment and financial services through APIs, is set to acquire a significant part of PayU, the payments group owned by Prosus, for $610 million. The move marks a significant step forward in Rapyd’s growth, fueled by a new financing round of $700 million. The acquisition will enable Rapyd to expand its scale and reach globally, aiming for an IPO in the future.
Rapyd’s current valuation stands at $8.75 billion, having raised over $806 million from investors like Fidelity, Dragoneer, General Catalyst, Target Global, and fintech giant Stripe.
PayU’s operations cover around 50 countries, but it will retain its businesses in India, Turkey, and Southeast Asia. The deal will grant Rapyd access to PayU’s “Global Payment Organization” (GPO), expanding Rapyd’s licensed or regulated countries to 41. This development enhances Rapyd’s capacity to offer a wider range of card-acquiring capabilities, particularly in Latin America and parts of Europe.
The acquisition aligns with Rapyd’s strategic goal of global expansion, targeting large enterprise businesses like Meta, Netflix, Adidas, and Inditex (Zara’s owner).
For Prosus, the deal streamlines its operations by divesting assets that were contributing to trading losses. The quarterly results from June showed that PayU’s GPO business resulted in trading losses of $83 million, while its operations in India drove growth and profitability in the overall segment.
The acquisition is subject to regulatory clearance. If successful, it will be the largest deal of 2023, with the financing accounting for 3% of all fintech fundraising for the year.
While Rapyd hasn’t set a specific timeline for its IPO plans, the acquisition provides more resources for its expansion and future initiatives. Rapyd plans to capitalize on the current market conditions, where privately-backed fintechs are facing negative pressure, and explore more acquisition opportunities.
For PayU, the deal represents confidence in Rapyd’s track record and potential to elevate the GPO business to new heights, adapting to the ever-changing fintech landscape.