PayU acquires 43.5% stake in payments technology firm Mindgate

PayU acquires 43.5% stake in payments technology firm Mindgate

Prosus-backed fintech unicorn PayU has acquired a 43.5 percent strategic stake in Mindgate Solutions, a real-time payment technology firm, the company said in a statement on March 20.

The deal values MIndgate between $180 million to $250 million, contingent upon revenue and profit milestones, according to a source involved in the discussions. For the 43.5 percent stake, PayU could end up paying anywhere between $80 million to $110million in multiple tranches.

Mindgate has reported revenue of around Rs 250 crore revenue and has more than 1,300 employees. The company is one of the largest UPI technology service providers in the industry and works with the country's largest banks.

"They are a people-heavy organisation and a services oriented business. However, the company is profitable, which will bolster PayU's attempts at becoming profitable before going for an IPO next fiscal," said the source.

Mindgate competes with other UPI and payment technology providers like Juspay and Sarvatra.

The deal strengthens PayU’s position in India's digital payments sector while supporting Mindgate’s global expansion, the firm said.

Mindgate’s majority ownership will remain with its founders.

The investment aims to enhance Mindgate’s existing partnerships with banks and improve merchant payment solutions. Mindgate, which processes over 8 billion transactions monthly, provides real-time payment infrastructure for major banks in India.

“This partnership marks a significant milestone in Mindgate’s global journey, combining our expertise in real-time digital payments with PayU’s market reach,” said George Sam, Co-founder and Business Head of Mindgate Solutions.

Anirban Mukherjee, CEO of PayU, said that the investment is a part of the company’s strategy to scale Indian payment technologies globally. “Mindgate’s expertise in real-time payments aligns with our mission to drive digital payment innovations worldwide,” he said.

Mindgate has a growing presence in regions including MENA, ASEAN, Europe, and the US. Its collaboration with PayU’s paytech business Wibmo is expected to drive further advancements in real-time payments, benefiting banks, merchants, and consumers worldwide.

For FY24, PayU India's revenue grew 11 percent to $444 million driven by increasing volumes from existing merchants and growing value-added services such as affordability, the firm said.

The fintech firm processed over $71 billion in total payments volume, up 22 percent on last year, on the back of growth in e-commerce, financial services and government segments.