After months of speculations around the launch of Dot, serial entrepreneur Shailaz Nag has now announced that his new startup has raised $8 Mn in seed funding.
Nag, cofounder of PayU India, is leading the offline-to-online (O2O) commerce and fintech platform along with two other former PayU employees— Gyanesh Sharma and Anurag Gupta. The seed round has been led by PayU, the payments and fintech business of Prosus (earlier Naspers), and Fosun RZ Capital with participation from Info Edge Ventures and other angel investors.
Nag was associated with PayU for eight years, which also counts Naspers as an investor, and led the global payments giant’s business in India. Prior to this, he was also a founding member at travel and hospitality Ibibo Group, which was later acquired by MakeMyTrip in 2016. Nag announced his exit from PayU India in July 2019.
Nag has now said that Dot is a technology startup, providing novel digital transformation and commerce solutions to brick and mortar outlets. Dot aims to revolutionise the offline-to-online market space by combining fintech capabilities with extensive customer engagement offerings.
Earlier in September, it was reported that DotPe, as the company was registered in May 2019 and is raising $5 Mn-$10 Mn. It was speculated that PayU, Fosun International, Info Edge and a few angel investors may invest in $10 Mn equity financing round in the company. Another report said that Dot is raising $5 Mn from Naspers Fintech and a Chinese investor.
“There is a huge potential in the offline-to-online commerce and fintech sector, offering immense opportunities for the right product. India has the second-largest number of internet users in the world and a rapidly increasing smartphone user base. This, coupled with the recent digitisation push both from the government and the private sector is generating tremendous demand for digital transformation solutions by brick and mortar stores,” said the founder.
Tej Kapoor, co-executive president of Fosun RZ Capital, said, “The Dot team has a deep and intrinsic understanding of the Indian fintech space and a proven history of creating and running successful companies, be it PayU or Ibibo. The current digital experience of offline merchants is broken at many levels and the engagement with customers is non-existent. Dot will change that and consequently create immense value.”
Sanjeev Bikhchandani, founder and executive vice-chairman, Info Edge, said, “We believe that Dot has identified an important untapped market segment. It is founded by a stellar team and has the first-mover advantage, which is a winning combination.”
Over the past year, the focus of the fintech and ecommerce has shifted towards merchants which are said to present the next $1 Tn opportunity in the space. From Flipkart and Amazon to Paytm, PhonePe and several others, the opportunity of selling to MSMEs and merchants has been gaining traction.
A Credit Suisse report claims that the Indian digital payment sector is expected to grow five-fold and reach $1 Tn by 2023.