BASIX Sub-K iTransactions Limited, a mobile payments platform promoted by Vijay Mahajan’s BASIX Group, has raised an undisclosed amount of equity investment from Michael & Susan Dell Foundation. Sub-K provides residents of rural, urban and semi-urban areas with a mobile technology based transactional platform for access to services like banking, NREGA, utility payments, prepaid mobile pop-ups and others.
This is done through a network called basic convenience outlets (BCO) operated by Sub-K agents. Sub-K appoints service providers/banks at one end and BCOs at the other.
Sub-K, which means less than 1,000 as also ‘for everyone’ in Hindi, tries to offer a financial solution encompassing accessibility(BCO to be located within 1,000 meters from customer), affordability(within a cost of 1,000 paisa or Rs 10 per transaction) and outreach(each BCO is expected to serve up to 1,000 customers).
The organisation raised the undisclosed amount sometime in 2011, though the exact date could not be ascertained. BASIX, promoted by Vijay Mahajan in 1996, is one of India’s largest development group focusing on financial inclusion at the bottom of the pyramid. It has promoted Bhartiya Samruddhi Finance Ltd, India’s oldest microfinance institution which currently going through a loan recast process.
While repeated calls made to Sub-K did not elicit any response, a spokesperson for Michael & Susan Dell Foundation confirmed the development to VCCircle.
“Our investment will allow the organization to enroll more than 2 million clients and help to attract additional financing for the next phase of the organization’s growth. We believe that funding this type of catalytic intervention will help us to fulfill our mission of promoting economic stability for the poor urban households,” Geeta Goel, portfolio director (Microfinance) at Michael & Susan Dell Foundation, said in an emailed statement to VCCircle.
Sub-K provides banking services like deposits, withdrawals, money transfers, balance inquiries and mini-statements. Here, it has partnered with players like Syndicate Bank, Axis Bank, Citi, ING Vysya Bank, Ratnakar Bank and KBS Bank. Besides banking, Sub-K also provides mobile top-up, utility bill payments, tax payments, ticket booking, NREGA payments, among others.
In the twelve months leading up to August 2, 2011, Sub-K had set up a network of 522 BCOs servicing over 75,000 customers in 7 districts across 4 states and 3 partner banks, according to its website. It plans to expand to over 2,000 BCOs servicing over 20 lakh customers across 8 states with 6 partner banks before March 2012.
Several mobile payment companies targeting India’s unbanked population have raised venture capital funding like Obopay, PayMate, mCheck, among others. A report by Boston Consulting Group said last year that $350 billion in payments and banking transactions will be done through mobile in India by 2015.
Michael and Susan Dell Foundation has invested over $700 million in nonprofit organizations across the United States, South Africa and India. Several of its investee companies in India have gone on to raise larger rounds of funding from mainstream private equity and venture capital funds. These include Janalakshmi Financial Services (Citi Venture Capital International), Waterlife India (Matrix Partners) and Ujjivan Financial (Sequoia Capital), among others.