SUMMARY
With The Investment, Social Capital Has Emerged As Majority Shareholder In Bengaluru Based Ezetap
Bengaluru-based mPOS solutions provider Ezetap has raised $16 Mn in a funding round led by JS Capital Management, the VC arm of Jonathan Soros. As part of the round, the startup’s existing investors, Social Capital and Hong Kong-based Horizons Ventures, also increased their stake in the digital payments company.
The company will be using the investment to innovate further and expand its payments platform. Ezetap is also currently looking to increase its sales and operations across most cities in India as well as overseas.
Post the funding round, Salil Seshadri, the Chief Information Officer at JS Capital Management, will be joining Ezetap’s Board.
Commenting on the development, JS Capital Management founder and CEO Jonathan Soros said, “We have been watching what’s been going on in India fintech for several years, and have been impressed by the number of technical, business, and operational challenges that Ezetap has solved. Ezetap is democratising payments in a country that is going digital at an unprecedented rate, but the impact of that transformation will be felt globally.”
With the latest round, Social Capital has assumed majority shareholder status in Ezetap, followed by Li Ka-Shing’s Horizons Ventures.
Commenting on the company’s decision to increase its stake in Ezetap, Social Capital founder and CEO Chamath Palihapitiya said, “India is on the brink of a massive surge in consumer consumption, but not until the underlying payments infrastructure is securely in place. Ezetap is in an incredible position as the leading platform for Indian merchants, with deep IP and no obvious US proxy – it’s like a combination of Stripe, AWS and Android, built for the complexities of the Indian market.”
Ezetap Providing MPOS Solutions To 200K Merchants & Users
Founded in 2011 by Abhijit Bose, Bhaktha Keshavachar and Sanjay Swamy, Ezetap is a mobile point of sale (mPOS) platform that claims to be the first to move payments to a pure software-as-a-service business model. The company’s proprietary technology has helped integrate the payment experience of mPOS into a variety of software applications and systems commonly used by merchants.
In 2015, the company launched a UPI-centred payments platform that allows merchants to accept digital transactions from credit/debit cards, digital payments, and mobile wallets via any kind of interface, including biometric data, SMS, and digital QR codes.
Speaking about the newly-raised funding, Ezetap co-founder and CEO Abhijit Bose said, “We are fortunate to not only have investment but strategic insight from top tier investors who have backed some of the best businesses across the globe. India is at least five years ahead of the US in terms of fintech innovation, and Ezetap is at the forefront, thanks to the support and guidance of our investors.”
Ezetap currently claims to have a user base of more than 200K merchants across India. In a month, the mPOS solutions startup processes digital payments worth $135 Mn. The total transaction volume has grown 8X in the last 18 months and is on its way to increasing by another 3X within the next 18 months as per a company statement.
According to Bose, Ezetap’s annual GTC run rate currently stands at $1.45 Bn, of which around $1.23 Bn comes from cards alone. In the last six years, more than 15 Mn consumers have transacted via Ezetap’s payments platform.
In June 2017, the mPOS startup acquired FortunePay for an undisclosed amount. The acquisition was made to help Ezetap further expand its payments technology. Ezetap has raised more than $51 Mn in funding till date. Its investors include American Express, Prime Venture Partners, and Capricorn Ventures (Jeff Skoll Group).
In August 2015, Ezetap Mobile Solutions secured about $23.53 Mn (INR 150 Cr) in a funding round led by Social Capital, Helion Advisors. Berggruen Holdings along with Horizons Ventures, the private investment arm for Li Ka-Shing, and the Capricorn Investment Group also participated in this round of funding.
Bose added, “It is a perfect storm. We have a society and economy that is ready for digital adoption, mobile internet infrastructure that finally allows us to reach every citizen, a once-in-a-lifetime government policy, coupled with a scrappy fintech ecosystem in which the winners will have built scalable, difficult-to-replicate businesses in a low margin market. The fintech companies that come out of India in the next few years will help redefine business models and how people transact globally.”
2017: The Year Of Fintech Revolution In India
Following the launch of India’s Digital Stack and the introduction of demonetisation in November 2016, the digital payments space has witnessed exponential growth. According to a report by Google and Boston Consulting Group, the digital payments sector in India is projected to reach $500 Bn by 2020.
In the point of sale (POS) payments space, Ezetap competes with startups like Mswipe, ePaisa, Paynear and Mosambee, among others. In May 2017, Mswipe entered into a strategic partnership with online payment service provider PayU India. According to the deal terms, Mswipe has taken over the offline merchant acquiring the business of PayU India.
For a fintech startup like Ezetap, India offers the opportunity for unbridled growth. The latest funding from JS Capital, Social Capital, and others will allow the mPOS solutions company to tap into the country’s fast-expanding digital economy, which is slated to reach $4 Tn by 2022.
