Fintech firm Innoviti raises Series B round from SBI-FMO Fund, others

Bangalore-based fintech firm Innoviti Payment Solutions Pvt. Ltd has raised $18 million (Rs 120 crore) in a Series B round led by the SBI-FMO Fund, Bessemer Venture Partners LP and existing investor Catamaran Ventures.

The SBI-FMO Fund is a joint venture between Japan’s SBI Holdings Group, which is a spinoff of SoftBank Group, and Dutch development bank FMO. It invests in financial technology companies.

“Innoviti is a company focused on developing unique solutions for the Indian payments context and we like companies with the ability to create IP. We believe these solutions will also be valuable to other countries in Asia and we will work with Innoviti to extend our network in this region to them,” said Suramya Gupta, fund manager, SBI-FMO Fund.

In June, Innoviti had raised $5 million in its Series A funding round from NR Narayana Murthy’s investment arm Catamaran Ventures and Canada-based New India Investment Corporation.

“The first round was used for re-architecting our flagship uniPAY payments platform into a full-fledged enterprise-grade product, uniPAY Next, and extending the platform to offer lending solutions to small businesses under the smelending.com brand,” Rajeev Agrawal, chief executive at Innoviti, said in a statement.

According to Agrawal, the fresh capital will be used to expand the market for uniPAY Next and smelending.com to target payments and lending to facilitate working capital loans to kirana stores, small merchants and brand franchisees across the supply chain.

Innoviti was founded in 2002 by Agrawal, who holds a B Tech degree and PhD from IIT, Bombay. Before wearing the entrepreneurial hat, he had worked with Sasken Communications in Bengaluru.

The company started its payments business in 2008. It helps merchants receive payments across channels, including online and on mobile, in-store, and at the time of the delivery of a product. Through smelending.com the company helps businesses get short-term loans of even Rs 30,000 for, say, 15 days or more.

According to Agrawal, Innoviti processes Rs 20,000 crore transactions across 50,000 point-of-sale terminals every year, while smelending.com has processed more than 150,000 loans, annually, for over 30,000 small businesses. It has so far disbursed $500 million.

Innoviti’s payment platforms serve a client base of merchants, which include Reliance Retail, Titan, Landmark Group, INOX, Indigo and Walmart, among others. Banks such as HDFC, ICICI, Axis, SBI, Standard Chartered, Kotak and Citibank use the platform to access customers for processing their payments and distributing loans.

Less than 10% of India’s retail payments are currently digital, creating a market opportunity of more than $500 billion annually. Similarly, the shortfall in supply of funds to SMEs is estimated to be a $300-billion-plus market, said Agrawal.

The fintech sector has received considerable investor interest over the past few months. A VCCircle analysis showed that since January, 25 fintech startups have raised funds from venture capital investors across the payments, digital lending, personal finance and payment gateway space.

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