Fintech firm PayU, backed by global consumer internet group Prosus, has acquired a 43.5% strategic stake in India-based real-time payment technology provider Mindgate Solutions, bolstering its position in the country’s digital payments ecosystem.
The transaction values Mindgate between $180 million and $250 million, depending on future revenue and profitability milestones, according to a person familiar with the matter.
The deal is expected to be completed in multiple tranches, with PayU potentially investing between $80 million and $110 million for its stake.
Mindgate, which employs over 1,300 staff, reported annual revenue of about 2.5 billion Indian rupees ($30 million).
It is among the largest Unified Payments Interface (UPI) technology service providers in India, working with major banks and processing more than 8 billion transactions monthly.
The company competes with other players in the space such as Juspay and Sarvatra.
The investment comes as PayU looks to improve its profitability ahead of a planned initial public offering in the next fiscal year.
Mindgate’s profitable, service-oriented model and its strong partnerships with banks are seen as strategic assets in this regard.
While the majority ownership in Mindgate will remain with its founders, the partnership with PayU is expected to accelerate the company’s international expansion, particularly in regions such as MENA, ASEAN, Europe, and the United States.
Mindgate is also expected to collaborate closely with Wibmo, PayU’s payment technology business, to strengthen real-time payments infrastructure globally.
PayU said the deal will enable enhancements in merchant payment solutions and support the broader adoption of Indian payment technologies on a global scale. The move aligns with the company’s long-term strategy of driving innovation in digital payments.
In the financial year ended March 2024, PayU India posted an 11% increase in revenue to $444 million, supported by higher transaction volumes from existing merchants and growth in value-added services.
The company processed over $71 billion in total payment volumes during the period, a 22% rise from the previous year, fueled by demand in e-commerce, financial services, and government transactions.