Cashfree allows businesses to send money instantly to bank accounts
The funding round was led by South Korean VC Smilegate Investments
It will use the funds to scale up its operations into full service business banking platform
Bengaluru-based payment gateway startup Cashfree has raised $5.5 Mn (INR 38.2 Cr) in its series A round of funding, led by South Korea-based venture capital company Smilegate Investments.
Existing investor, Y Combinator along with other investors such as George Osborne, former chancellor of the exchequer of the United Kingdom, and Vellayan Subbiah, former managing director of Cholamandalam Investment, also participated in this round.
The startup also has plans to more than double the number of its employees in the next two-three months to 100 from 45 at present.
Cashfree was launched in 2015 by Akash Sinha and Reeju Datta. It is a payments and banking technology company which allows businesses to send money instantly to bank accounts and cards by using API which can be integrated with their product, instead of uploading complicated files on their corporate banking portal.
“There are new companies coming up that require flexibility and control over how money moves. Our API Banking platform, Payouts, enables this. It connects any organisation’s software product or ERP to the banking system for automated transactions,” said cofounder Akash Sinha.
The startup works with banks such as ICICI, HDFC, Kotak and Yes Bank to build the core payments and banking infrastructure to power its products.
According to the company, the payment gate is now being used by more than 12K businesses for vendor payouts, wage payouts, bulk refunds, expense reimbursements, loyalty and rewards.
Currently, it counts companies such as Xiaomi, Tencent, Zomato, Cred, Club Factory, ExxonMobil, Google-backed Dunzo, donation platforms like Ketto and Milaap as its customers.
The service is also integrated with major internet companies such as Shopify, Wix, Paypal, Amazon Pay, Google Pay and Ola.
Apart from the payment gateway services, Cashfree supports instant refund, split payment solution for marketplaces, bank account verification API and a virtual account solution auto collect, in order to match inbound payments to customers.
In 2017, the startup has raised $120K (INR 83.5 Lakh) in its seed funding round from Silicon Valley-based Y Combinator. The funding was utilised to ramp up the company’s sales and engineering teams, product development, boost market engagement and strengthen its relationships with banks.
With the rise of internet users in India, the number of online transfers of money is also increasing. Some of the notable online payment gateway startups are Rayzorpay, Paypal, CCAvenue, Instamojo and EBS.
Payment gateway startup Billdesk had also raised an undisclosed amount of funding from global payments technology company Visa in November 2018 to develop new product lines for its payments and loyalty businesses and also expand its footprint into other geographies.
According to report by Global Information, Inc (GII), the Indian payment gateway market is expected to reach $1,708 Mn (INR 11,892 Cr) in 2025 at a CAGR of 19.3% between 2018 and 2025.