Cholamandalam Acquires 72% Stake In Hyderabad Based Fintech Startup Payswiff For INR 450 Cr

Cholamandalam Investment and Finance Company has acquired a majority stake of 72.12% in Hyderabad-based online payment gateway startup Payswiff Technologies (Payswiff) for a sum of INR 450 Cr, according to filings accessed by Inc42.

Cholamandala will be spending INR 4,10,00,04,230 purchasing 25,26,718 shares at a price of INR 1,622.66 per share from founders and existing investors, and INR 40,00,00,293.9 subscribing 2,46,509 shares at a cost of INR 1,622.66 per share. It will spend a total of INR 4,50,00,04,524 on the transaction. 

The payment services provider had a turnover of INR 21,058.34 Lakh in 2020-21, which is a 218.34% increase over the same figure in 2019-20 when it had a turnover of INR 6,615 Lakh. 

Founded in 2013 by Prabhu Ram, Priti Shah, Anil Bharadwaj, Ravi Kiran, Krishna Kishore and Maulik Shahof, Payswiff (earlier know as Paynear) offers omnichannel payment transaction solutions for businesses that help them accept payments from customers in-store, at home, while delivering using an mPOS (mobile point of sale), online and other POS solutions. 

The founding team had earlier founded another payment gateway startup, EBS in 2005. It was sold to Ingenico Payments in 2013 before they embarked on a new journey with Paynear.

Paynear had acquired Singapore-based startup GoSwiff. This deal gave Paynear access to 20 new markets in Southeast Asia, the Middle East, commonwealth states and eastern European markets. Paynear financed the acquisition with a mix of debt and equity. 

The global payment gateway market is projected to generate revenues of $67 Bn by 2028, growing at a CAGR of 16.6% between 2021 and 2018. The increase in demand for smartphone payment transactions and ecommerce sales are expected to be the key drivers for this growth. 

Payswiff competes against giants such as Pine Labs, Mswipe, Ezetap and Paytm.

Between 2014 and 2021 Hyderabad-based startups have raised close to $2.1 Bn across 250+ deals. In terms of acquisitions, the startup hub has seen over 40 city-based startups getting acquired. Some of the notable ones include MartJack’s acquisition by Capillary Technologies, Nowfloats acquisition by Reliance, amongst others.