Startup Deep Dive : PayNearby — revenue fell the year it started chasing an IPO

PayNearby’s revenue fell by roughly a sixth in FY25, to ₹298.77 crore ($31.1 million) from ₹357.32 crore a year earlier, according to consolidated financial statements sourced from the Registrar of Companies (RoC). In that same shrinking year, profit after tax jumped six-fold, from ₹1.92 crore to ₹11.41 crore.

That is the contradiction sitting at the heart of India’s oldest branchless-banking network: a business that turns kirana stores, medical shops and tailoring outlets into mini-banks has spent most of a decade doing huge transaction volumes on wafer-thin margins, and only started looking healthy on paper the year its topline got smaller. It is now trying to convert that fragile turnaround into an IPO.

Quick facts

What they do

PayNearby runs a business-to-business-to-consumer network that turns ordinary neighbourhood shops — kirana stores, medical shops, tailors, newspaper vendors — into what it calls “fintech marts.” A retailer signs up on the PayNearby app, gets a biometric or card-based device, and starts offering their walk-in customers cash withdrawal and deposit via Aadhaar-enabled Payment System (AePS) rails, domestic money transfer for migrant workers sending cash home, utility bill payments through the Bharat Bill Payment System, and a growing list of add-ons — insurance, travel bookings, digital gold, and credit referrals for gold loans and small-ticket lending. The company calls this a “Distribution as a Service” (DaaS) model: it does not open branches or ATMs itself, it rents out the trust and footfall that already exists at 13 lakh-plus retail counters, mostly across small-town and rural India where formal bank branches are thin on the ground.

The origin

Anand Kumar Bajaj grew up in a small town in Bihar and, before starting PayNearby, held a senior role at YES Bank — press coverage from the period describes him as the bank’s former president — where he had a ringside view of how far formal banking still had to travel to reach ordinary Indians. His diagnosis, repeated in interviews since, was simple: retail was evolving in urban India, but small retailers themselves were not being equipped to evolve with it. Rather than build more bank branches or ATMs, Bajaj’s insight was to treat the millions of small shops that already existed in every mohalla as a ready-made, trusted distribution layer — and to use the biometric rails NPCI was building around Aadhaar to let those shopkeepers do teller-window banking without ever touching a customer’s money without a paper trail. He co-founded Nearby Technologies Private Limited with Subhash Kumar, Yashwant Lodha and Rajesh Jha, incorporating the company in Mumbai on 20 April 2016 — seven months before demonetisation would hand every AePS-based network in the country an unplanned tailwind.

The struggle years

PayNearby’s setbacks were not the dramatic near-death pivots of a consumer app; they were the slow-burn kind that come from running a low-margin, infrastructure-dependent business at scale. Two are well documented.

The first arrived early and outside the company’s control. On 5 March 2020, the Reserve Bank of India placed YES Bank under a 30-day moratorium and capped withdrawals at ₹50,000 per depositor, after the bank’s finances collapsed. PayNearby ran its cardless-ATM and AePS services through a YES Bank tie-up, and publicly insisted its systems were “functioning without any disruption,” telling reporters on 7 March 2020 that it was a “strong technology backed fintech company with multiple banking partners.” Even so, Inc42’s own reporting on the crisis listed PayNearby among the AePS players caught up in the disruption. The moratorium was lifted early, on 18 March 2020, after the finance ministry approved a rescue restructuring — but for thirteen days, a company whose entire pitch was reliability to cash-dependent, often unbanked customers was leaning on a bank in default.

The second struggle has been quieter and longer-running: PayNearby has operated for years on razor-thin net margins despite processing hundreds of crores in revenue. In FY24, on revenue of ₹357.32 crore, it reported a profit after tax of just ₹1.92 crore — a margin of roughly half a percentage point, on a business doing hundreds of crores in scale. That is not a business in crisis, but it is a business that, for most of a decade, made almost nothing on everything it moved, a structural weakness of the assisted-banking model once free UPI rails began eating into the commissions that used to come from cash-out and remittance.

The turning point

If there is a single event that changed what PayNearby was, it is the COVID-19 lockdown of 2020. When bank branches shut or ran reduced hours and India’s government scrambled to push direct benefit transfers into the accounts of daily-wage workers and the poor, PayNearby’s retail-agent network was declared essential and became one of the few open windows through which people in small towns could get cash or receive money from family. Before the pandemic, the company’s scale was already large by BC-industry standards — AePS transactions alone had run to about ₹31,500 crore in FY19-20. In the twelve months that followed, FY20-21, that AePS book grew to roughly ₹40,000 crore and total gross transaction value (GTV) across the network hit about ₹54,000 crore (roughly $7.5 billion at then-prevailing rates), with AePS transaction volumes rising 46% year-on-year to 18 crore transactions from 12.5 crore. On the other side of the ledger, retail agents themselves earned an estimated ₹290 crore in commission income that year for playing teller. The pandemic did not just add a good quarter — it validated, in front of regulators and banking partners, the entire premise that a shopkeeper’s counter could stand in for a bank branch when the branch itself was unreachable.

The money behind it

PayNearby’s capital structure is unusual for a fintech of its transaction scale: there is no marquee, headline-grabbing venture round in the primary record. What is documented:

• Seed capital came from Roha Group, the Tibrewala-family business conglomerate, reported at roughly ₹15 crore around June 2016 — soon after incorporation and months before demonetisation.
• As of 19 May 2025, founders held roughly 77% of the company, with institutional funds holding about 12.7%, angel investors about 5.3%, an employee stock option pool about 3.8%, and other holders the remainder — a cap table that has stayed overwhelmingly founder-controlled rather than being diluted by successive priced VC rounds.
• No independent, primary-press-confirmed valuation figure could be established this session; aggregator sites cite a figure in the low hundreds of crores, but without a second corroborating source it is left out here rather than repeated.
• The company has instead scaled largely on its own transaction economics and internal accruals: in mid-2025 its founder said PayNearby planned to invest $50-60 million over the following three years from internal accruals — not fresh external capital — to chase a goal of onboarding 500 million UPI users and becoming, in his words, the country’s third-largest UPI player.

In an industry (Spice Money, FIA Global) that has largely been VC-fed, PayNearby’s decade of running mostly on founder capital, one conglomerate-backed seed cheque, and its own cash flow is itself one of the more unusual facts in its file.

How it makes money

PayNearby earns a slice of every transaction its retail partners process, plus referral fees for products it does not itself underwrite. The main lines:

• AePS cash withdrawal and mini/cardless-ATM services — the original 2016 product, still the largest single transaction category by volume; PayNearby takes a commission from partner banks per withdrawal, a share of which is passed to the retail agent.
• Domestic money transfer (DMT) — remittance commissions, largely serving migrant workers sending cash to family in another town or state.
• BBPS bill payments and recharges — collection commissions on utility bills, mobile recharges and similar recurring payments routed through the Bharat Bill Payment System.
• Credit referrals — lead generation for gold loans and other secured lending from partner banks and NBFCs; the founder told SME Street (13 June 2025) that credit-referral volumes had grown roughly seven-fold year-on-year.
• Value-added services (VAS) — insurance, travel bookings and digital gold; the company said VAS revenue grew about 18% year-on-year with a five-year compound annual growth rate of around 20% (company-stated, SME Street, 13 June 2025).
• UPI — in December 2025, PayNearby received Third Party Application Provider (TPAP) approval from NPCI, letting it issue and route its own UPI transactions rather than only reselling bank rails, a step toward the “third-largest UPI player” ambition its founder has stated publicly.

The part people tend to get wrong: PayNearby is not a payments app competing with PhonePe or Google Pay for a consumer’s phone screen. Its customer is the shopkeeper, not the person withdrawing cash — the retail agent is the paying, onboarded relationship; the walk-in customer is often unbanked or under-served and may never install an app at all.

The numbers

Only two fiscal years of audited, RoC-sourced revenue and profit could be verified from primary reporting this session; earlier-year figures circulating on aggregator sites conflicted with each other and could not be confirmed against a primary filing, so they have been left out rather than guessed at.

Revenue fell about 16-17% year-on-year in FY25 even as PAT rose six-fold, mainly because total expenses were cut by roughly a fifth — a cost-out story rather than a growth one. The founder has separately said the company has been profitable in seven of its nine years since inception and has now strung together 12 consecutive quarters of profitability (company-stated, SME Street, 13 June 2025) — a claim not independently verified against filings for every one of those years, but consistent with the FY24-FY25 pattern of small, positive, and now-improving profit on a large revenue base.

Where the money comes from

• Geography: PayNearby’s network spans over 20,000 PIN codes as of March 2025 (company-stated, SME Street), concentrated in small towns and rural India where bank-branch density is lowest.
• Network size: about 13 lakh retail partner outlets as of March 2025 (SME Street, 13 June 2025) — a network that has grown in geographic reach but not obviously in retailer count since August 2021, when the company reported roughly 15 lakh retail stores across 17,500 PIN codes (Entrepreneur India).
• Women retailers: about 1.5 lakh of current retail partners are “Digital Naaris,” the company’s branding for women-run outlets (SME Street, 13 June 2025).
• Product mix: the older, low-margin core — AePS cash-out, DMT, bill payments — still carries the bulk of transaction volume, but the newer value-added layer (credit referrals, insurance, digital gold, travel) is the fastest-growing slice, up about 18% year-on-year (company-stated).
• The surprise: the single fastest-growing line by volume is not payments at all but credit — gold-loan and other lending referrals, up roughly seven-fold year-on-year in FY25 (company-stated) — meaning a business built to move cash is increasingly a lead-generation channel for banks and NBFCs that don’t want to open branches in the towns PayNearby already covers.

The risks

• A fragile margin story going into an IPO. FY25’s headline profit jump came from cutting costs by about a fifth while revenue fell 16-17%, not from renewed topline growth (RoC filings via Medianama, March 2026). A business preparing to court public-market investors on a profitability turnaround needs the next year’s revenue to grow again, or the improvement risks reading as one-off cost discipline rather than a durable model.
• Dependence on partner-bank health. PayNearby’s AePS and cardless-ATM services run on rails leased from partner banks; the March 2020 YES Bank moratorium showed what happens when one of those partners fails, even though PayNearby said its own systems kept running without disruption.
• Regulatory and rail risk. Revenue is built almost entirely on commissions from NPCI-run rails — AePS, BBPS, and now a newly granted UPI TPAP licence (December 2025). Any tightening of AePS biometric-authentication rules, a fraud-driven clampdown by NPCI on the AePS channel, or a cut to bank commission pools would compress margins directly, in a business that already runs on a low single-digit take rate.

The takeaway

PayNearby’s decade is a reminder that scale in “assisted” digital India does not automatically translate into margin. A network that moves ₹54,000 crore in a single pandemic year, or that has been profitable in seven of nine years since founding, can still spend most of that time earning less than one rupee in every hundred it processes — because the rails it depends on (AePS, DMT, UPI) keep getting cheaper for the customer and more commoditised for the operator. The businesses that survive that squeeze are not the ones that defend the old commission lines the hardest, but the ones that keep bolting new ones on before the old ones go to zero — which is exactly why a company that started as a cash-withdrawal counter now makes more of its incremental money referring gold loans than moving cash.

Frequently asked questions

What does PayNearby actually do?

PayNearby partners with small retail shops — kirana stores, medical shops, tailors — and equips them with devices and an app to offer their walk-in customers Aadhaar-enabled cash withdrawal, money transfer, bill payments, and referrals for credit, insurance and travel, earning a commission on each transaction.

Who founded PayNearby and when?

PayNearby’s legal entity, Nearby Technologies Private Limited, was incorporated in Mumbai on 20 April 2016 by Anand Kumar Bajaj, who is MD and CEO, along with Subhash Kumar, Yashwant Lodha and Rajesh Jha.

Is PayNearby profitable?

Yes, on a small scale. It reported a profit after tax of ₹11.41 crore in FY25 on revenue of ₹298.77 crore, according to RoC filings, following a much smaller ₹1.92 crore profit in FY24 on higher revenue of ₹357.32 crore.

Has PayNearby raised a lot of venture funding?

Not in the way most fintechs of its transaction scale have. The clearest documented outside capital is a roughly ₹15 crore seed round from Roha Group around June 2016; founders still held about 77% of the company as of May 2025, and no independently confirmed large venture round or valuation figure could be established from primary sources this session.

Is PayNearby planning an IPO?

Its CEO said in August 2025 that the company had begun the IPO process and was in talks with merchant bankers; as of March 2026, PayNearby had not filed a draft red herring prospectus with SEBI.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Medianama, “PayNearby Revenue Drops Ahead of Planned IPO Push,” March 2026 (FY24/FY25 revenue and profit from RoC filings; IPO status)
• SME Street, “PayNearby Posts ₹17 Crore EBITDA in FY25,” 13 June 2025 (company-stated FY25 EBITDA, retailer network size, Digital Naaris count, VAS and credit growth rates, headcount, hiring plans)
• Tofler, company financial summary for Nearby Technologies Private Limited, accessed September 2026 (corroborating FY25 revenue and profit year-on-year change)
• Inc42, “YES Bank Moratorium Impact On Fintech: UPI, APIs, Point Of Sales And More” (PayNearby named among affected AePS players; CEO statement)
• Business Standard, “Yes Bank crisis: PayNearby says functioning ‘without any disruption’,” 7 March 2020
• PayNearby company press release, “Amidst pandemic, PayNearby distributed Rs. 54,000 Cr of assisted digital services in FY 20-21,” 2021 (GTV, AePS volumes, retail agent earnings)
• Entrepreneur India, “This Fintech Startup Is Empowering Kirana Stores,” August 2021 (founding story, Roha Group seed funding, 2021 network size)
• YourStory, “This former YES Bank President’s startup claims to have reached retailers in 5000 pincodes by just word of mouth,” July 2018 (founder background)
• Tracxn, PayNearby company and shareholding profile, data as of 19 May 2025 (cap table / shareholding split)
• Tofler / Zaubacorp / IndiaFilings, corporate records for Nearby Technologies Private Limited, CIN U74999MH2016PTC280037 (incorporation date, registered entity)
• Inc42, PayNearby funding profile, accessed September 2026 (funding record cross-check)

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