PayU India issued 4.9 Cr equity shares to MIH Payments Holdings B.V., the investment arm of Prosus parent Naspers, last month

This fundraise is to fuel the growth of our credit business, which is expected to breakeven by September

PayU India’s total revenue grew 21% year-on-year to $669 Mn in FY25 from $551 Mn in FY24

Prosus-owned fintech platform PayU India has raised INR 302 Cr (about $35 Mn) from its parent Prosus to shore up its credit business.

As per the company’s MCA filings accessed by Inc42, PayU India issued 4.9 Cr equity shares to MIH Payments Holdings B.V., the investment arm of Prosus parent Naspers, last month.

Confirming the development, a PayU India spokesperson told Inc42, “This fundraise is to fuel the growth of our credit business, which is expected to breakeven by September. It also reflects Prosus’ confidence in our growth trajectory and our path to profitability.”

Notably, this comes months after Inc42 reported that Prosus injected INR 1,013 Cr in PayU via a rights issue.

Founded in 2002 by Nitin Gupta, Shailaz Nag, Jose Velez, Martin Schrimpff, Arjan Bakker, and Grzegorz Brochocki, PayU serves as the digital payments and lending arm of Prosus. In 2011, Ibibo launched PayU PG to help websites integrate ecommerce transactions with online payments. In 2014, the entity was demerged from Ibibo to form PayU India, with Nitin Gupta and Shailaz Nag as its cofounders.

PayU India has two businesses – payments and digital lending. While it charges a commission for processing digital payments, the digital lending vertical provides unsecured personal loans to consumers and business loans to SMBs. It provides the loans via its NBFC PayU Finance.

PayU India’s total revenue grew 21% year-on-year to $669 Mn in FY25 from $551 Mn in FY24, as per Prosus’ annual report. However, its adjusted EBIT (aEBIT) loss widened to $44 Mn in FY25 from $32 Mn in FY24.

Its payments business saw revenue grow 12% to $498 Mn and reached breakeven in H2 FY25.

Meanwhile, the credit vertical’s revenue jumped 60-63% to $171 Mn, with loan disbursements of $1.1 Bn in FY25. Its loan book stood at $558 Mn at the end of the year. However, the segment recorded a negative aEBIT margin of 19%, driven by “driven by higher financial leverage and higher-than-expected losses from the consumer loan book”, Prosus said.

PayU India Eyes Profitability Ahead Of IPO

While PayU India’s IPO has been in the works for years now, the company has once again postponed it and is now looking to improve its business. Last month, Prosus CFO said that PayU India will focus on strengthening its business over the next 6–12 months and IPO is not a priority for now.

With the payments vertical breaking even in the second half of FY25, PayU India has turned its focus on the credit vertical and has set a target of September this year for it to breakeven.

Talking about the plans to improve profitability, Prosus said in the annual report, “Looking forward to FY26, the year ahead will be a period of building for PayU on the back of initiatives started late in FY25 to improve its profitability profile.”

To achieve this goal, the company aims to scale its fintech ecosystem across merchants, consumers, and banks.

The RBI’s decision to lift its 15-month embargo on PayU’s merchant onboarding in April 2024, along with approval to operate as a payment aggregator (PA), is expected to boost its growth by driving higher transaction volumes and revenue. In FY25, following the regulatory relief, PayU scaled its merchant base by adding around 13,000 new merchants.

For the credit vertical, Prosus said PayU has tightened its underwriting standards and pivoted its credit strategy to focus more on partnerships, lending at checkout, and a shift toward SMB lending instead of unsecured consumer loans. The SMB loans accounted for 23% of the $1.1 Bn worth loans issued in FY25.

“We have implemented strengthened underwriting practices, on the back of which the new book, originated in 2024, is performing better, underlining the business’s adaptability and long-term potential,” the company said in its annual report.

Notably, PayU India competes with the likes of Razorpay, Pine Labs, Cashfree, Paytm, BharatPe, among others, across its two verticals.