Early stage venture capital firm Accel Partners (India) has invested in enStage, Inc., a California based provider of payment solutions. enStage specializes in serving the payment industry in emerging markets such as India and is a provider of authentication and payment solutions in prepaid, online, and mobile payments. The company also provides hosting and processing services, which include payment products and security solutions.
enStage payment products include the electronic card used by HDFC Bank under the name of NetSafe, as well as the Verified by Visa solution launched by several financial institutions. Its other clients include ICICI Bank, Kotak Mahindra Bank, Andhra Bank, Axis Bank, among others. enStage's product portfolio includes solutions for payment gateways, mobile payments, IVR payments, and eCommerce authentication. Its founders are Govind Setlur, who is also the CEO and Veena Mistry, who is the CTO.
"enStage has not only developed unique payment products, but has also established itself as a market leader in India; it is rapidly becoming a leading provider of infrastructure services in electronic payments," he added," said Subrata Mitra, Partner of Accel India.
A number of mobile and electronic payment firms have attracted venture capital funding in India. In one of the biggest deals recently in this space, world's largest mobile maker Nokia invested $70 million in Obopay. The company, which is looking to expand in India and China, has earlier raised $69 million from other investors. Other VC-backed firms, focusing on India, in this space are Paymate (KPCB, Sherpalo and Mayfield), mCheck (DFJ), JiGrahak (Helion), Prizm Payments (Sequoia Capital India), among others.
Mobile payments especially offers a compelling picture to investors given India's fast growing telecom market, which adds 8-10 million mobile users every month. While mobile users in India recently reached a tally of 400 million, the subscriber base is expected to zoom to 893 million by 2012 according to Cellular Operators Association of India. Mobile payments also provide banking solutions to the portion of the population that don’t have bank accounts.