PayU makes Southeast Asia foray with acquisition
PayU, the payments and fintech business of Naspers, is targeting the $250 billion Southeast Asia payments market.
This after the company this morning announced the acquisition of a majority stake in Red Dot Payment (RDP), a Southeast Asia-focused online payment solutions provider.
Under the terms of the agreement, PayU has acquired a majority stake in RDP in a transaction valuing the company at $65 million.
RDP’s founder will continue to retain a stake in the company, while the majority of other shareholders will exit, says PayU.
Evolve Capital Asia acted as exclusive financial adviser to the founder and selling shareholders.
Other Naspers interests in Southeast Asia include online classifieds and blockchain-enabled mobile payments.
PayU notes it supports over 300 000 merchants and millions of consumers making payments online, with over 250 payment methods and 1 800 payment specialists. The markets in which PayU operates represent a potential consumer base of nearly 2.3 billion people and a huge growth potential for merchants, the company says.
In a statement, PayU says with the RDP transaction, it expands into the Southeast Asia region and brings the total amount deployed in fintech investments and mergers and acquisitions to over $700 million over the last three years.
PayU is on an acquisition trail. Last month, it acquired Iyzico – a Turkish-based digital payment and fintech start-up company – for $165 million. This year, it acquired US-based digital financial security firm Wibmo for $70 million.
Other investments include Paysence ($5.3 million), Creditas ($60 million), ZestMoney ($3.7 million), Zooz (undisclosed), Citrus Pay ($130 million) and Remitly (R115 million), among others.
Last month, after Facebook announced plans for its Libra crypto-currency, PayU became a founding member of the Libra Association, with a vision to create a simple global currency and financial infrastructure that will empower billions of people.
Formed in 2011 by a group of payment experts from various Fortune 500 companies in the industry, PayU says RDP has grown into Singapore’s largest home-grown and trusted online payment solutions fintech company, delivering payment solutions across Asia and beyond.
With an ever-expanding presence across Southeast Asia, including offices in Indonesia and Thailand, RDP has been focused on booming verticals such as online retail, hospitality, charity, food delivery and more, the company says.
PayU notes that according to one Google-Temasek study, Southeast Asia is one of the fastest growing digital payments markets in the world, and is expected to triple in size to $240 billion in total payments volume by 2025.
It adds the region is already home to 350 million Internet users across its six largest countries, exceeding that of the population of the US, presenting an immense business potential for global merchants.
“This investment is PayU’s first step towards expansion in the Southeast Asia region,” says Laurent le Moal, CEO of PayU.
“We will now provide our existing global merchants access to Southeast Asia with a single API [application programming interface] integration, thus strengthening our global PayU Hub platform. Owing to the immense potential the Southeast Asia market presents, PayU sees a vast opportunity in this region to grow and innovate further. We will continue to look for prospects to reinforce our footprints in this market.
“As part of our business strategy, PayU will collaborate with the promising founders who are driven by an entrepreneurial passion. We’re excited to welcome Randy Tan [CEO and founder of Red Dot Payment] and the team to PayU as we continue to pursue our vision of creating a world without financial borders.”
Tan comments: “We are proud of how far we have come and that PayU, a leading global fintech operator and investor, recognises the strength, depth and breadth of the company that we have built with unwavering dedication over the past eight years.
“We are pleased that RDP will be part of the Naspers fintech portfolio as we look forward to continued extension of our business and market position in Southeast Asia to be the fintech payment solutions champion in this region,” Tan concludes.