In a significant move, Israeli fintech unicorn Rapyd is set to acquire PayU Global Payment Organisation (GPO) from the Netherlands-based investment firm Prosus. The deal, worth $610 million, was first reported by Calcalist in June.

Financing the Acquisition

Rapyd plans to finance this acquisition through a capital raise of approximately $700 million. This fundraising round is expected to be completed soon, with the company’s valuation remaining consistent with its previous funding round. PayU GPO, the acquired entity, boasts an annual revenue of $350 million and employs around 1,000 individuals. Notably, 80 of these employees are based in Israel and will be integrated into Rapyd’s operations.

PayU is a renowned provider of payment solutions for organizations and small to medium-sized businesses in developing markets. The company operates in over 30 countries worldwide. The acquisition will encompass all operations in Europe, the Middle East, Africa, and Latin America. However, PayU’s operations in India, Turkey, and Southeast Asia are excluded from the deal. The tender saw competition from several other payment giants.

A Long-Awaited Deal

“We’ve been working on this deal for two years. In 2021 it was too big a bite, but now we’ve succeeded. We’re closing a new fundraising round of $700 million to finance the purchase, which will be an all-equity fundraising,” Arik Shtilman, Rapyd’s CEO, told Calcalist.

PayU has a previous connection to the Israeli market. In 2018, the company acquired Israeli company Zooz for approximately $80 million, and it currently maintains a development center in Israel employing dozens of staff members.

Rapyd’s Acquisition History

Rapyd has a history of acquiring companies, including the Icelandic payments company Valitor in 2021, in a deal worth $100 million, as well as the fintech company Neat. Founded in 2015 as CashDash by Arkady Karpman, Arik Shtilman, and Omer Priel, Rapyd has developed an international payment platform for businesses and consumers, enabling bank transfers, transfers to digital wallets, cash payments, and more.

Rapyd’s Global Reach

Rapyd operates the largest online payment network of its kind globally, supporting 65 different currencies across more than 170 countries.

“PayU has revenues of $350 million a year, and in terms of manpower, we will double our company. The company’s revenues will increase by 60%. We will bring in approximately $500 million this year,” said Shtilman. “We are on pace to reach a billion dollars in revenues in about a year plus. Both companies together are profitable. We will continue at this rate of growth, and we would like to go public in two or three years at a value of more than $10 billion, depending on the market.”

The acquisition follows Rapyd’s recent announcements, which included the appointment of senior executives and the announcement of an intention to enter into the payments market in Israel.

PayU by the Numbers

• 100+ transacting countries
• Over 250,000 merchant clients globally
• Expansion of the Rapyd Global Payments Network to over 1,200 payment methods supported by 18 settlement hubs
• 41 countries that are licensed or regulated
• A portfolio of Tier 1 enterprise clients including Adidas, Google, Ikea, Meta, Netflix, Rappi and Uber
• A wide range of partner channels that acquire SMB merchants including integrated software vendors (ISVs), independent sales organizations (ISOs) and payment facilitators (PayFacs)
• A combined global workforce of 1700, working in 22 offices worldwide and representing 50+ nationalities

Post-Acquisition Capabilities

Upon completion of the acquisition, Rapyd will have the ability to carry out transactions in over 100 countries, using more than 1,200 payment methods. It has a permit for financial activity in 41 countries, with a wide range of partners, a global team that will include approximately 1,700 employees in 22 offices around the world, and serving over 250,000 customers worldwide, including prominent enterprise customers such as Adidas, Google, Ikea, Meta, Netflix, and Uber.

PayU CEO’s Statement

Laurent le Moal, PayU Chief Executive Officer, stated, “PayU has built and scaled its GPO business successfully over a number of years. It is important to us that a company with a track record like Rapyd will take the business to the next level, expanding the GPO solutions to meet the evolving needs of the dynamic fintech landscape globally. I wish Rapyd every success as it continues to build its global payments platform.”

TL;DR

Rapyd, an Israeli fintech unicorn, is acquiring PayU Global Payment Organisation from Prosus for $610 million. The acquisition will be financed through a $700 million capital raise. PayU, which operates in over 30 countries, will help Rapyd double its manpower and increase its revenues by 60%. The deal excludes PayU’s operations in India, Turkey, and Southeast Asia. Post-acquisition, Rapyd will be able to conduct transactions in over 100 countries using more than 1,200 payment methods.