Bengaluru-based payment gateway startup Cashfree has raised $5.5 million (Rs 38 crore at current exchange rates) in its Series A funding round led by South Korean venture capital firm Smilegate Investment, a company statement said.
Existing investor Y Combinator, a California-based startup accelerator also participated in the round. George Osborne, former British finance minister, and Vellayan Subbiah, former managing director of non-banking finance company Cholamandalam Investment also put in money, the statement added.
The company will use the capital to expand its team and to distribute its API banking platform, the statement said.
Cashfree’s application programming interface banking platform lets businesses send money round-the-clock and instantly to bank accounts using the Unified Payments Interface (UPI) and credit and debit cards. This prevents companies from uploading complicated files on their corporate banking portals.
“We have been growing 25% every month for the last 12 months. Our API banking platform connects any organisation’s software product or enterprise resource planning to the banking system for automated transactions,” said Akash Sinha, co-founder and chief executive officer of Cashfree.
The venture was founded in 2015 as a payment gateway by former Amazon and BankBazaar employee Sinha, and IIT Kharagpur graduate Reeju Datta. In mid-2016, it built a dedicated bulk payouts solution for businesses operating in India.
Cashfree had raised capital from Y Combinator and other investors in 2017. It was incubated at digital payments firm PayPal.
It is used by more than 12,000 businesses for vendor payouts, wage payouts, bulk refunds, expense reimbursements, loyalty and rewards. It counts Xiaomi, Tencent, Delhivery, Zomato, Cred, Club Factory, ExxonMobil, donation platforms like Ketto and Milaap amongst its customers.
India’s fintech sector comprises of many players across various sectors such as payments, lending, insurance and personal finance.
Recent deals in the space include digital payments firm BharatPe, which last week raised $15.5 million (around Rs 107 crore) in a Series A round of funding from US-based investment firm Insight Partners, Sequoia Capital and Beenext.
In February this year, online lending platform ZipLoan raised Rs 90 crore ($12.5 million) in a Series B round led by venture capital and growth-equity investment firm SAIF Partners.
In January, venture capital firm Lightspeed India Partners became the first institutional investor in a company which enables cashless payments on vending machines.
Around the same time, two former executives from online lending platform Lendingkart, Vishal Chopra and Himanshu Gupta, set up a venture in the alternative lending space called MoneyOnClick.
Last year saw some big ticket deals in fintech, including PolicyBazaar’s $238-million cheque from SoftBank and others, LendingKart’s $87-million round led by Fullerton, ClearTax’s $54-million round led by Hong Kong-based Composite Capital, Digit Insurance and InstaReM’s $45-million (each) cheques, and INDwealth’s $30-million funding round from Hong Kong-based hedge fund Steadview Capital.