Mswipe raises $31 mn from UC-RNT Fund and others; Axis Bank exits

Mumbai-based mobile point-of-sale services provider Mswipe Technologies Pvt. Ltd has raised Rs 200 crore ($31 million) from Ratan Tata-led UC-RNT Fund, Matrix Partners and other investors.

Existing investors Falcon Edge Capital and DSG Consumer Partners also invested in this round, Matrix Partners said in a statement. It added that the company will use the funds to develop a wide network of merchants accepting digital payments in the country.

UC-RNT Fund is a joint investment fund sponsored by Tata Sons Ltd chairman emeritus Ratan Tata and University of California.

“In a rapidly changing payments landscape, Mswipe’s open technology platform and ability to deliver solutions at the lowest cost sets them apart,” said Vikram Vaidyanathan, managing director at Matrix India.

Mswipe founder and CEO Manish Patel said the company is developing the next-generation Android-based smart point-of-sale terminals that will offer merchants GST-compliant billing and inventory management on the same device. GST refers to goods and services tax, a new unified system for indirect taxes that India will roll out from July.

Separately, Axis Bank said in a stock-exchange filing it has sold its entire 8% stake in Mswipe for Rs 80.94 crore ($12.5 million). The private-sector lender didn’t specify the name of the buyer.

Axis Bank’s stake sale values Mswipe around Rs 1,012 crore ($157 million). Mswipe was valued around $101 million in July 2015 when it raised $25 million in a Series C round from Falcon Edge Capital, Meru Capital and cab-hailing firm Ola, as per VCCEdge, the data research arm of VCCircle.

A person familiar with the matter said investment bank Avendus Capital advised MSwipe on the fundraising.

Earlier in the day, The Economic Times had reported, citing two unnamed people, that Mswipe raised funding at a valuation of $200 million.

Mswipe was founded in March 2011 by Patel. He has a degree in medicine from Mumbai University and had also co-founded Milestone Merchandise, an alcohol-beverages distribution company.

The company offers point-of-sale solutions to small- and medium-sized businesses, enabling plastic card payments via mobile phones. It also provides a card reader that can be attached to any mobile handset with a 3.5mm headphone jack. The card reader converts the mobile phone into a card acceptance device.

Mswipe has a payment network of 2,46,000 terminals spread across 550 cities. The annualised value of total transactions enabled by Mswipe across its network is Rs 9,560 crore. The transaction value on the Mswipe network quadrupled last year, the statement said.

The company posted revenue of Rs 57.4 crore for the year through March 2016, according to the Axis Bank filing. It had total assets of Rs 165.1 crore as of March 2016.

Last month, Mswipe had acquired offline merchant PoS division of digital payments firm PayU India for its offline push.

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