The round was led by Australian VC firm Square Peg, with participation from Lightspeed, General Catalyst and Moore Strategic Ventures
The startup will use the funding to support more currencies, incorporate more payment methods, and expand business globally
XFlow last raised $6 Mn in October 2021 from Lightspeed, Stripe and General Catalyst
Cross-border payments solutions startup XFlow has bagged $10.2 Mn as part of its Pre-Series A funding round led by Australian venture capital (VC) firm Square Peg. The round also saw participation from Lightspeed, General Catalyst and Moore Strategic Ventures.
The startup will use the funding to fuel growth, strengthen its tech stack and expand its product offerings. The investment will be deployed towards supporting more currencies, incorporating more payment methods, and expanding the business to international geographies.
A part of the capital will also go towards ramping up hiring largely across the tech, sales, marketing and design verticals.
“… Since the launch of our first product in November 2022, we have been able to support several customers — small and large. With this new round of funding, we aim to increase the number of currencies we support, expand coverage of local payment methods in various countries and support all kinds of businesses in India,” said XFlow cofounder and chief executive officer (CEO) Anand Balaji.
Reacting to the announcement, Partner at Lightspeed Bejul Somaia said,”… We believe the founding team’s prior experience and focus on compliance, risk, product, and engineering, positions them strongly, and we are excited to continue supporting the company.”
Speaking with Inc42, Balaji said that the company would continue to focus on India as a core market in the next six to nine months and would then eventually look at global markets to further fuel its growth. He added that XFlow was adding dozens of customers every month and is processing ‘millions of dollars’ in cross-border payments currently.
Founded in 2021 by former Stripe India head Anand Balaji, and Ashwin Bhatnagar, XFlow is a B2B fintech startup that streamlines cross-border payments for Indian businesses, enabling them to send and receive money in a regulatory-compliant manner. The startup claims to target clients from small and medium enterprises (SMEs) to enterprise platforms.
This comes a couple of years after XFlow raised a $6 Mn seed funding round led by Lightspeed, Stripe, and General Catalyst in October 2021.
XFlow caters to a wide range of clientele for international transactions, including names such as WeWork India, Inkle and iCliniq.
The traditional cross-border payments system continues to be plagued by jurisdictional issues and the somewhat lack of real-time technology to track such payments. This has seen the emergence of new startups, which have leveraged technology to fill the gaps left unattended by traditional banking infrastructure.
This has attracted the interest of investors. Earlier in February, cross-border payments platform Tazapay secured $16.9 Mn in a funding round led by Sequoia Capital, EscapeVelocity and PayPal Alumni Fund. Earlier this year, it was also reported that RazorpayX had also launched a forex service for startups as part of its foray into the cross-border payments segment.
Besides, the National Payments Corporation of India (NPCI) has also signed a slew of agreements with countries to roll out the homegrown unified payments interface (UPI) system across the globe.
At the heart of the cross-border payments industry is the growing exports from the country, which have spurred payments to and fro from the outside world. At around $83 Bn, India was one of the largest global markets for inward remittance flow back in 2020 and the number has only grown since then. And with the rise of Indian businesses with global ambitions, the space is expected to get further impetus.
As per a report, the global cross-border payments market is projected to grow to a market size of $238.9 Bn by 2027.