Team Startupcity

· Raises Rs 302 crore from Prosus to boost credit business

· Aims to achieve profitability in lending by September 2025

· Lending revenue up 60% YoY; shifts focus to SMB and embedded finance

Fintech giant PayU India has raised Rs 302 crore (about $35 million) from its Netherlands-based parent Prosus, as part of its continued effort to turn profitable its credit business by September this year. The capital came in through the issue of 4.9 crore equity shares to MIH Payments Holdings B.V., an investment company controlled by Prosus' parent group Naspers.

This fresh infusion comes after an earlier rights issue when Prosus put in Rs 1,013 crore, marking firm and consistent support for PayU's India business. "This fundraise is to support the growth of our credit business, which is on track to breakeven by September," a PayU India spokesperson said in an interview with Inc42. "It also indicates Prosus' faith in our growth story and our profitability journey.

Established in 2011 as a subsidiary of Ibibo, PayU India became a standalone company in 2014 with Nitin Gupta and Shailaz Nag being part of its founding leadership. It now operates as the digital payments and lending business of Prosus in India across two major segments: payments and digital lending via its NBFC business, PayU Finance.

Whereas PayU's payments business that contributes the majority of its revenues achieved breakeven during the second half of FY25, its lending business continues to incur losses even though it has strong growth. PayU India reported $669 million in revenue in FY25, up 21% from $551 million in FY24, as per Prosus' annual report. Adjusted EBIT loss, however, expanded to $44 million from $32 million in the prior year.

The lending business, which provides unsecured personal loans and business loans to SMBs, witnessed revenue increase by 60–63% to $171 million in FY25. It gave out $1.1 billion of loans, with outstanding loan book closing at $558 million. However, it reported an adjusted EBIT margin of -19%, largely owing to financial leverage and high losses in the consumer loan book.

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In turn, PayU has enhanced its underwriting norms and is shifting focus to SMB lending and embedded finance, such as checkout funding solutions. Interestingly, SMB loans accounted for 23% of total disbursements in FY25. "We have put in place more rigorous underwriting practices, on the back of which the new book, emerged in 2024, is performing well, highlighting the business's resilience and future prospects," Prosus said in its annual report.

Recovery efforts have been supplemented by two regulatory milestones: the Reserve Bank of India's April 2024 move to remove a 15-month ban on merchant onboarding, and the final authorisation in May 2025 of PayU to act as a payment aggregator.

While PayU had also earlier considered an IPO, the same has been shelved for now. Prosus' CFO recently validated that over the next 6–12 months the business fundamentals will be strengthened, with a public listing no longer being a priority.